The paper Metaprogramming Emergent Graphics has a brief explanation of the algorithm, as does this section of this document.
There are two main galleries, one made in 1993 and the other made in 1996. This one was also made in 1993 but uses the "source match" feature.
The algorithm is very similar to Efros and Leung's texture synthesis and Rob Silver's Photomosaics, but predates both by many years.
GPL source code (for linux batch version) here, and gimp plugin here including documentation and more examples here.
k.m. krebs used to have an excellent fuse image gallery, now i can only link to the wayback machine.... i did find he has this album cover though.
spot at draves dot org