Paul Fejos (U.S., 1928, 69 min.)
Mary (Barbara Kent) and Jim (Glenn Tryon) meet at Coney Island and fall in love, spending their day off riding rides, eating carnival food, and snapping a photo in the photobooth. They pose in the semi-enclosed photobooth, and take one photo each. The photos are returned to them inside the booth, and are small circular disks with a dark background.
Jim's photo comes out a little goofy, and Mary's comes out nicely. Later, when they get separated, they each show a fairground employee their photo of the other, hoping he can help them to be reunited.
In the final sequence of the film, having not found each other, both Mary and Jim have returned to their apartments, and Jim takes a look a the photo of Mary one more time.
Lonesome has the distinction of being the earliest film featuring a photobooth that we've found so far. Strangely enough, Barbara Kent is part of the other earliest-known appearance of a photobooth in film, in the 1929 Harold Lloyd film Welcome Danger.
Thanks to Klaas for letting us know about this in early 2006. Finally, two and a half years later, we've finally come across a copy to provide some still images; please forgive the low quality.
UPDATE 2/17/13: Finally, some better quality images.
Contributed by Klaas and Brian