Today's the first day of the Christmas shopping season, and I think I've found a pretty cool - and cheap - gift idea. The other day I found this program called AndreaMosaic. It's a small freeware application (Windows only I'm afraid) that takes your digital photos and rearranges them to create a mosaic version of any image you want (like the Entertaiment Weekly cover of Julia Roberts above). There are some more examples here.
I have been playing around with it with pictures of Madame and it works really well. The more images you have the better the mosaic comes out - and obviously the bigger the final image the better it will look. You could even bring one of the files to Kinkos or something and get them to make a huge print. Your friends might not want a 4x6 foot mosaic photo of your baby, but I'm betting the wife will love it.