AndreaMosaic lets you make beautiful images from photos stored on your hard drive. (It's freeware, but if you like the program, you can make a PayPal donation.)
Don't worry about the somewhat confusing interface. I'll tell you what you need to know to get started, and the excellent user guide can explain the rest.
The first time you run AndreaMosiac, the program will want to know what collection of photos it should use as source material to be your new creation's "pixels." To keep things simple, you might want to grab a hundred or so of your favorite photos and copy them to a new folder. Then, in AndreaMosiac, click Find Tiles. Click Create Collection, navigate to the folder with the source photos, and name your collection. It'll take a few minutes for AndreaMosiac to create the collection, so have some patience. When it's done, click Close. You'll be back on AndreaMosaic's main screen, where you need to fill in a few more details. In Step 2, for example, you need to enter a width for each tile. I suggest a number between 50 and 100 for this first mosaic.
The last step is to choose a photo to turn into a mosaic. AndreaMosiac is not going to change the photo--it will use whatever photo you choose as a template and make the mosaic look like it. Click Add Image and select any photo on your computer. When you're done, click Create the Mosaic's (perhaps a donation will help the author correct the grammar). After a few minutes of processing, you'll get your first mosaic.