I just discovered this while goofing around in Microsoft Paint. If you take a section of a picture

and resize it by the maximum amount (500%) and then the maximum amount again, you get…..

Lots of little squares! This sort of pattern could be the inspiration for a mosaic, a quilt, or something in Minecraft.

There is software that will allow you to do the same thing in a much more complicated way. It’s called Spritecraft. Not only does it break your picture into little squares, it also translates the colors into the Minecraft approximations (using colors of wool, clay, etc).  It doesn’t build the object for you, you have to build it yourself using the pattern it gives you.

http://www.minecraftforum.net/forums/mapping-and-modding/minecraft-tools/1261370-tool-spritecraft-turn-images-into-minecraft

Here is a Minecraft mosaic of Notch from that link above.