Packets are layer three. Frame Relay is Layer Two (like Ethernet) and so they use Frames.
Routers to not assemble or reassemble anything, they remove the packet from the frame at the ingress (incoming) interface, make decisions based on what it sees in the header of the packet, then (assuming all is correct) it puts the packet into a new frame and sends it out the appropriate egress (exit) interface.
Frames (even frame relay frames) are Layer Two, they deliver packets (Layer Three) that will be used to reconstruct segments (Layer Four) and the segments are passed up the stack, possibly interpreted or manipulated by the other layers as it passes through, to ultimately be delivered through the calling process of the application.
The Frames are switched, the packets are routed, because there is no "network" information in a Frame; "network" information is determined from the (in this case) IP (or IPX) address and mask in the packet.
The Frame Relay devices in the "cloud" have settings (look-up tables) that pass the frame relay frame from ingress PVC to egress PVC from the originating end to the destination end of the network.
Good Luck
Scott
