Check out this really cool video by Alex Schlegel created using a really simple feedback loop with a webcam, computer, and projector (no extra graphics processing):

Video experimenting with the feedback-induced patterns a webcam creates when viewing its own feed projected onto a wall. I connected a 1080p digital projector to my laptop and projected the laptop’s display onto a wall (the image was about 6ft. across). Next I connected a cheap webcam to my laptop and positioned it facing the wall, roughly centered on the projection, approximately 5ft. away, and as high as I could without casting a shadow on the projection. I started the webcam’s test program (the webcam seems to refresh at about 10-15Hz), maximized the window, and then filmed the wall using a digital video camera placed on a small tripod on top of the projector. As I filmed I experimented with different modes of mouse movement (freehand, circle, figure-eight, zig-zag, and random). I used Windows API calls from a program I wrote in Visual Basic to control the automatic mouse movements.