The Droste effect — known as mise en abyme in heraldry — is the effect of a picture appearing within itself, in a place where a similar picture would realistically be expected to appear. The appearance is recursive: the smaller version contains an even smaller version of the picture, and so on. Only in theory could this go on forever; practically, it continues only as long as the resolution of the picture allows, which is relatively short, since each iteration geometrically reduces the picture's size. It is a visual example of a strange loop, a self-referential system of instancing which is the cornerstone of fractal geometry.
Don't get it twisted... I didn't write that shit... that's a cut and paste from Wikipedia.