The explanation page is a little less mathmatical. I've copied and will try paste here.
Escher's Droste Effect
Published on 17 November 2008
The "Droste effect" derives from a Dutch chocolate maker that used an image of its box on the box recursively at smaller and smaller scales.
MC Escher's "Prentententoonstelling" (print gallery) image took this idea one step further and mapped the image on itself in a spiral. However, he only got so far with pen and paper leaving an enigmatic white centre. It wasn't until the Dutch mathematician, Hendrik Lenstra, worked out the maths behind the image transformation that the complete effect could be visualised. Take a look at the illustrated write-up that gives a good explanation about the process.
Jos Leys took the process further and created a generic logrithmic image transformation that can create endless zooming animations. This process was turned into a Mathmap script by Josh Sommers and Briec and now has an active Flickr group that use it.
I've ported the Mathmap script over to Adobe's new Pixel Bender Toolkit. Pixel Bender was officially released as part of the CS4 suite but is also available as a free download. The filters will run in After Effects, Photoshop CS4 and Flash 10 (in some cases) so there is huge creative potential here!