Most people are familiar with Wordle and its capabilities.
"Wordle is a toy for generating 'word clouds' from text that you provide. The clouds give greater prominence to words that appear more frequently in the source text. You can tweak your clouds with different fonts, layouts, and color schemes. The images you create with Wordle are yours to use however you like. You can print them out, or save them to the Wordle gallery to share with your friends" (copied from the Wordle webpage).
Basically, it can turn your text into a picture of text. You can enter the words in the editor or copy from a blog post or webpage. It has the words that are used more often in a larger text and gives a graphic picture to what can be a long set of text. There are some basic editing (size, color, font) but it is basically just a static picture. Still, a very cool tool. Here is a Wordle of a recent post involving the Wii in the classroom. It is pretty clear to see that I used the word "students" most often!
Now there is a new tool out there called tagxedo. If you look at the picture below, you can still see that it is a Wordle, but different. Tagxedo has taken it the next step further (someone always does) and has made it so you can create your Wordle into any picture shape you want. You just follow a few prompts, choose your image, choose your text and viola! you have yourself a Wordle 2.0! As you can probably tell, I used the same post to collect the words and you can see the similar sizes of the words ("students" still is the most used word in the post). You can make more changes with the text (besides the options with Wordle you can choose if you want the words to be horizontal or vertical or multiple, you have more color options and orientation options) and can integrate a whole different level with pictures!
A few points to consider. First, you have to install Microsoft Silverlight program to use Tagxedo, but it is a free download and install. Second, when you are choosing a picture, make sure that it is one where the outline makes sense. You can choose to have your words go on the inside or the outside of the picture, but if you can't make out the outline of the picture, it probably isn't going to turn out the way you would want. Third, the page says that you can upload your own picture free while it is in beta testing. I would guess, at some point it will go from a free site to a fee site and you will lose that ability. But until then, give it a shot!