WWW NOTE: One Photoshop file is included in the Mac distribution. 93K total.
Note: To see this file correctly requires Word 5.0 with Times Roman font at 12, 18 and 24 points. To see the imbedded sample pictures be sure to turn off "Use picture placeholders" under Edit (or "Commands...")
IMPORTANT: Set the screen to "256 Greys" in Monitors or Switcheroo. Not "256 Colors" (Word then uses the System color table, which has only 16 greys and renders the sample pictures severely banded!)
Requirements: Photoshop, should work with any version, menu descriptions are for V2.0
Screen: This works down to 8 bit monochrome
Author: Kai Krause, Curved Space*Design, Malibu [...] For comments, questions, further variations there is a corresponding folder on Compuserve in the Graphics area: Go Graphics>Graphics B Vendor+ forum>HSC or Go KPT.
There is a basic file in this folder explaining details of the Displacement Map process. Please read it first.
Following is only a short description of a particular filter, (which is part of this archive and can be applied to any image)
fig 1a) 
The horizontal offset is controlled by channel #1
The white areas mean maximum horizontal movement to the left, black areas force to the right, effectively tearing the image apart left right...
fig 1b) 
The vertical offset is controlled by channel #2
The Black area on top will pinch downwards, the white area upwards squeezing in a diagonal bow tie as seen below:
fig 2a) 
fig 2b) 
fig 2c) 
The effect is influenced greatly by the Scale settings in the Displace Dialog. With both horizontal and vertical set to 3 / 3 (fig 2a) the spatial distortion is minimal. The face shows subtle warps. At 33/33 (fig 2b) the schizoid double image is clearly visible. At 66/66 (fig 2c) they have separated into two halves. Notice the emergence of a third small image in the center, rotated about 40 degrees ccw....
fig 3) 
At over 100 and with the "Wrap" option turned on, the complex spacewarp has gone to its extreme. The tiny center image stands on its own, next to all the edges coming together in a complete circle... Interesting.
Note: The image being displaced here is 200x200 pixels. If your image is larger you have to increase the Scale variables accordingly. Read the main Displace document for further details.
Discover, Displace, Describe the results in the KPT folder..... thanks, Kai Krause