AlphaPicture patented a technology called Widescope that allows two pictures to seamlessly fade into each other as if they were one photo to begin with. To promote their technology and their products they created the LetterJames web site. Here, up to 25,000 visitors a day create free pictures with customized text that you can e-mail to friends so they can e-mail two friends, and so on, and so on, ...
For the free feature, click here or look for the E-cards link on the home page. Images created are 72 dpi and about 4"x4" (please respect copyright). You can also test out the feature in the right side bar by typing the text you want and selecting one of the pictures.
They also have a product line for sale but I think it's only setup for the UK. But the free E-cards are cool.