The Droste/Escher effect is a technique with which you can make some amazing pictures.
I learned how to use it from a tutorial by Josh Sommers on Flickr, check out his amazing work.
The code used to generate these images is based on the maths these guys from Leiden produced to complete a litograph by Escher who apparently could not figure out how to complete it himself.
Browsing through Josh's Flickr gallery (which I can recommend) I came across this link to a music video using the effect as an animation... Amazing!
Wild Beasts - Brave Bulging Buoyant Clairvoyants. Dir: OneInThree from OneInThree on Vimeo.