In a nutshell, it's Wordle.
The graphic above is the word cloud generated by Wordle using the text in this blog site! You can use any site, any text block, anything you want to type into the program or copy and paste. It's fun to scroll through the gallery, too. Lots of design uses for this program!
This is a great word cloud design site, passed along to me from Caryl Gaubatz via Pat Schulz, who knows my interest in text on the surface. I'm posting it here, not only to share, but I find that it's helpful to use my blog as a kind of electonic filing cabinet of ideas I want to explore more!
MORE: the developer of Wordle referred me (via his posterous page) to another, newer word cloud design generator -- http://www.tagxedo.com/app.html
With Tagxedo, you can also put the cloud into a specific design shape or form and manipulate more of the criteria for the design.