Almost finished my first illuminate movie poster frame.
I have small living room so a full size movie poster would look silly, I found some nice 53cmx38cm box frames that had little 5x7 recess frames in it. I took those out and used the wood strips to keep the glass in place, I put velcro on them so they could be taken off easily for poster changes.
Grabbed some LED strip from eBay and soldered it all up and I have a nice little frame that cost me about £16 to build (minus power supply, I have a PC PSU wired up powering multiple devices, fans etc.)
Only downside to this particular frame is you can't buy posters for it pre-made, thankfully there are many folk on eBay that will print off one for you, that way you can customise them with coming soon in the corner and the like.
I'll update once I have a poster in it, also need to source some light diffusing sheet.
Most posters designed to be illuminated come in a double sided format where the back of the poster is also printed but in reverse. That reinforces the colors and avoids some of the washed out look you are getting. See if your printer can handle that detail, and it will look that much better.
Also, it really does need to difusser, and I think the difuser as you can see the rows of LEDs.