EDIT(Jan 23, 2007): Recently the boys over at Pictobrick released their software and good documentation. Feel free to check them out as well.
EDIT(Jun 27, 2007): I went ahead and setup a blog about making the mosiac as well as any future mosaics I will undertake. Feel free to leave a comment over there as well if you would like DarthLego
""EDIT(Oct 21, 2007): ""Well, I presented this instructable at the Maker Faire in Austin, 2007. For those of you coming here from that event, welcome. I invite you to email me with any questions or comments you may have with any steps that may be confusing. You can find my email address at DarthLego otherwise, leave a comment here!
Step 1: Source Image
When looking for an ideal photo, keep in mind that the resultant lego mosaic is going to be displayed in a pretty small resolution. For example, the source image is 225 x 169 pixels, the end image was resized down to 96x64 which equals in lego, about 30" x 20". In other words, you will loose a lot of the fidelity of the photo so don't choose a photo with a lot of details. Or if you want the details, be prepared to create a huge mosaic $$$.