There is a wonderful post today over on Paperback Writer. "The Droste Effect" also has applications to fiction writing.
The Droste Effect is named for a Dutch cocoa maker that employed a recursive image (an image which contains an image of itself that contains an image of itself that contains an image of itself, etc.) on its tin.
Escher had a lot of fun with the Droste Effect, too, which can be explained mathematically. If you loop a droste effect image, you can create a little piece of infinity, ala Rooney Design's Christmas Zoom Movie.
In fiction, we have a similar term -- mise en abyme* which is the practice of telling a story within a story. Usually this takes form as a character within the story telling a story, as Stephen King is quite fond of over-doing to the point of where I want to slap some duct tape over the mouth of every old guy who walks into one of his scenes. But for the sake of this post (and because the Dragon is not fond of French) I'll refer to the story-within-a-story device as droste.
--Pop over to her website for more on this technique.