The frames site does a POST back to the server when the Preview button is pressed. It sends the attributes back and presumably the server builds a composite picture based on the attributes. (This can be done with the PHP image functions, http://us2.php.net/manual/en/ref.image.php, or you can use some other toolkit.) Simple enough to do in the case of the frames, since each attribute affects a different region of the picture.

That's one way to go about it. You could also use AJAX. Either would work for the case of handbags. I think it would be better to do this on the server rather than sending the client all the images for all possible combinations. Plus you'd avoid the problem of dealing with browsers that don't handle images properly. I don't know how you would design a feature like this for general use, but for your specific needs this should work fine.