Thread: How to: Hide files inside pictures.

http://en.wikipedia.org/wiki/Steganography

*edit*
by the way,
the method shown above, while quite impressive, has a few major flaws
(if you want to do nasty things)

first, the "secret" information is just appended to the end of the image data
(it's compressed, but that's it)
if you're scanning for known data, it'll be flagged up quite easily

second, you can only append a small amount to the end of the image
an image 100x100 with a file size of 100mb would be very obvious

in any case,
steganography is still pretty cool