I did in fact finally get the photos off my camera and onto Flickr. (I'm modernhypatia over there, as well.)If you click through here, you can see I've put up this photo of our current display and used the notes technique to label the books with the author and title. (I got the idea from another library display photo on Flickr: I think it's a fantastic tool.)
We've posted a link to the photo of the display (and the sign) on our internal Library Resources page on our school Moodle site, too, so parents and students can check it out that way. (Plus, we'll have a long-term record of what the display was.)
In terms of having photos public - we're wary of photos involving students, because the school has some specific policies and restrictions about how we post them (quite reasonably). Also, I find it much easier to get pleasant photos of things rather than people, which is my flaw as a photographer.
I've also heard of concerns about book cover images. In this case, however, one could argue that it's a derivative work: the display is new content (a particular association of items), with some commentary, and all of the individual images (i.e. book covers) are identified in the notes. You can, I think, make a decent argument for this being fair use.