[lotuseclat79]

Here. Just follow the link and click on the Droste effect image (no it's not a recursive link!)

Reference to Droste effect (hint: recursive picture) here.

-- Tom

[lister]

If you have Photoshop, it's very easy, just create an image and flatten to one layer, then duplicate it [the layer] and then use masks for the section you want the recursive image to be in on the original and place the duplicate behind.
repeat ad infinitum (well, a few times).