Looking at the Ethernet entry on Wikipedia, I can't figure out how it's indicated how long the Ethernet frame is. The EtherType/Length header field apparently can indicate either a frame type or an explicit length, and I'm guessing that in the case of a frame type, it has to do some other logic to figure out how long the packet is. For example, if the EtherType field is 0x0800, that indicates an IPv4 payload, and so the receiving NIC would have to examine the first 32 bits of the payload to find the length of the IP packet, and therefore to figure out the total length of the Ethernet frame, and know when to look for the end-of-frame checksum and interframe gap.
Does this sound correct? I also looked at the IEEE 802.3 spec for Ethernet (part 1, anyway) which seems to corroborate this, but it's pretty opaque.
The Physical Coding Sublayer is responsible for delimiting the frames, and sending them up to the MAC layer.
In Gigabit Ethernet, for example, the 8B/10B encoding scheme uses a 10 bit codegroup to encode an 8-bit byte. The extra two bits tell whether a byte is control information or data. Control information can be Configuration, Start_of_packet, End_of_packet, IDLE, Carrier_extend, Error_propagation.
That is how a NIC knows where a frame start and ends. This also means that the length of the frame is not known before it has fully decoded, analogous to a NULL-terminated string in C.
The article you really want to answer your question is http://en.wikipedia.org/wiki/Ethernet_II_framing; which says:
Logically, there are only three options:
One of these works in Ethernet because there are no other options currently available for modern networking ;) 1st and 3rd are wrong for Ethernet, so you're correct!
Took a while to work this out once before, and again now. Not much info on it available, which is surprising as it's such an obvious question. I finally settled on the solution that the length fields in the packet headers are used. See the following link
http://www3.rad.com/networks/infrastructure/lans/etherform.htm#_ieee