Free digital frame effects?

Ah, I'm not sure if this is what you're looking for, I usually find Adobe Photoshop's feathering effect quite useful. =D
[Edit: Oops; sorry--I didn't notice the "free tools" part... I'm curious about that too... ]
Feathered edges
- Use the rectangular marquee tool to outline a box with about equal-sized distance from the outside

- Choose "Insert" on the top menu ==> "Inverse"

- Go back to the "Insert" on the top menu again ==> "Feather" & choose feather radius (this example uses 1 pixel)
- Press the 'delete' key on your keyboard to delete the inversely selected area, and you should end up with a feathered edge! =)

If you chose a larger radius, the edges will be blurrier (the pic below uses 7 pixels)

 

Gimp is a free (open source) photo editing software, that has frames available.
http://www.gimp.org/

Otherwise, most of your photo editing suites these days have a ton of frames that come with, and people host free downloads of additional frames. I use Paint Shop Pro most often.

 

http://picasa.google.com/