Minecraft 1.5.1 with Forge build 604 and Optifine Ultra A8 here, on Win7 64 bit and Java 17 x64 Same bug occurs, 3D items do not display in item frames, 2D items do. It renders on the back side, tested that by placing the frames on glass blocks so I could see the back. So, if using Optifine, you can keep everything on fancy, just set the dropped items to Fast to work around the issue. Please notify Lex to fix this and change recommended build too.
I have genuine Minecraft 1.5.1 with the lastest Forge build (600), the vanilla launcher, and Optifine 1.5.1 Ultra A7 which is said to be compatible with build 600. It works indeed, unless I try to place any mod .zip-s in the Mods folder, in which case the "usual" black screen pops up after the Mojang logo. The error report is as follows: