Charlieplexing of discrete leds has been the topic of a few other instructables. The Charlieplexing LEDs- The theory and the How to drive a lot of LEDs from a few microcontroller pins comes to mind. They are both excellent and should be read by anyone that wants to gain a deeper knowledge of how charlieplexing really works.
Charlieplexing 7-segment displays is more or less the same as doing it with discrete leds, but with some changes to handle the fact that all the led segments have a common pin instead of being separate, and the need for buffering of the common output so the poor microcontroller can cope with the load.
Step 1: Why
Due to a shortage of available i/o-pins on the Atmel Tiny26 that I've used for the pulse generator project I couldn't use the standard multiplexed way of doing this. The standard multiplex would require 14 i/o-pins - 8 for the segments (don't forget the dot) plus 6 for the common anode/cathode of each display.
By Charlieplexing the displays I only need 9 i/o-pins and the displays are still muxed in a 1:6 way acheving the same brightness as standard muxing. Charlieplexing usually only light up one led at a time thus giving a reduced brightness if you want several leds to be (visibly) lit at the same time.
Of course I could have used a BCD-to-7segment decoder chip (74LS48) plus a 1-to-8 decoder (74LS138) but that would have been cheating, and i didn't have any '48ths as hand and I really wanted to be able to fit the pulse generator in an Altoids-like box.