Well you might know this already, and this might be completely useless information to you but... I don't care.
So what you do is get an item frame, put it where you want it (obviously). Then put a trapdoor in the item frame, place a block over the item frame, look at the bottom of the block and place the torch, and finally destroy the block.
It makes the torch look like it is hooked in, it's quite nice looking.
So yeah, sorry for no pics, hope that made sense.
If you click the corner of the block the frame is on it will place the torch over the frame. I'm not sure if that is what you are talking about. Looks good with most blocks, like a block of cobble in a castle. Should experiment though. I bet there are some good combinations or uses.
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I see your thread and I raise you the exact same thread.
sounds neat. im always looking for unique lighting for diffferent areas like the potion room or the nether portal area.
Edit: Just ran some experiments and found that it's a great place to hide something. Placeing a lever on a wall then the item frame looks decorative and still allows you to use the lever. Then you can put something like a diamond block or flint and steel in teh item frame and it's hidden by the lever. Also I think the half slab in the item frame looks the most like a torch base holder than most blocks. But being able to hide stuff in plan site is a neat trick... at least I think it is.
inversely if you place a torch then look at the corner of the block so the outline of the block and not the torch shows up u can place the item frame behind it.
i also think that a piece of fence looks pretty good holding a torch.
you can also place buttons. similar to the lever concept the above user posted. except this is only decorative in creative since hitting it will mine it and activating it will just turn the item in the frame.
You need to place the torch on the same block the item frame is on, not in the item frame itself. Its easier if you place the torch first then the item frame, as the torch hitbox is much smaller than the item frame. Hope that makes sense.