Basically it is a bit like replacing each pixel with a tiny photo that 'sort of' represents that pixel.
One technique of image substitution for pixels, was shown in the discussion (and the specific post)...
viewtopic.php?f=1&t=17389&start=15#p67746
however this was only for grayscale, and involved enlarging the pixel pattern before using a slow 'FX' to replace each 'gray tile' with a specific image.
Photo montages of this is more commonly done by generating a data base of color -> image, and doing similar substitutions.
One web page I came across even looked at roughly mapping 4 pixels to one image with that type of color segregation, though that may be harder to find appropriate images.
See
http://caca.zoy.org/study/part7.html