Oh yeah, hadn't thought about corner posts...if you held the plaster back 3/4" from the face of the frame you'd have a funny little triangular column of wood in each corner. Maybe run a lamb's tongue chamfer on the edge of each corner post for a point of interest?

For braces I like Gabel's idea of orienting them to the inside face of the frame. Any reasons - structurally speaking - why this would be less ideal than centering braces or holding them to the exterior face as usual?

Miles