My brother's laptop died, dont even know why yet. As Im plannig his new desktop build to replace it, I was wondering if its possibe to use it's shell as a monitor+keyborad terminal for a Midi stasion PC I have in a Rack.

Problem with the rack PC is its current monitor and keyboard/ mouse are taking up visual space and allways seem to get in the way. It would be great to be able to 'fold it down' like a laptop...

While technically this is possible, in practice you will find that getting it to work is sufficiently complicated to make it unfeasible. Laptops don't use standard interfaces inside, so you'd have to at the very least make a physical adapter for the keyboard and a physical and electrical adapter for the screen.

May depend how dead it is. If motherboard/processor/video & networking work, could use as VNC terminal. (e.g. Boot it from USB drive or from network.) (e.g. dead disk/disk controller/etc.)

There are Via mini-ITX boards with LVDS LCD connectors that uses the same format as laptop LCDs, it's one of those things that industrial PC workstations use, though i've never tried that out. There's still the powering of the LCD. If you want to try that, tell us how it turns out.