I am came across this on Channel 10 and I am reposting it here so that I can take a look at this software when I have time. Sounds quite interesting.

AutoCollage is a new photo mashup tool from Microsoft Research Cambridge which allows you to automatically create collages from a collection of your photos. The software cuts out interesting parts of the photos in your collection and pieces them together following natural features as boundaries between images. The photos are then blended together using sophisticated computer vision technology as well as other software which does face detection, object recognition, image blending, and other graphic techniques. The end result is a collage created from your very own photos. 

Although the software is doing pretty complex stuff on the back end, the front end is surprisingly easy to use. You just point it to a folder containing your photos and click a button - that's it! AutoCollage will then goes to work. When the collage is complete - a process that only takes a few seconds - your resulting image can be printed, emailed, or set as your desktop wallpaper. 

For great results, it's suggested that you use 7-30 photos for the best performance, but the software defaults to 12. AutoCollage works on both Vista and XP SP2+ and is available as a free download from here.