This morning I read about a website called Mutapic, (http://www.mutapic.com)
"What can I do with Mutapic?  Mutapic helps you to create artwork. It is a tool for designers, artists and craftsmen. It can be used to create logos, patterns, decorative elements, and just for fun!"
screen shot of Mutapic

In the free version, you choose 2 designs from the picture library, press the green button to generate a gallery of 16 variations, and choose controls from the side buttons to create more variations.  Click on one of the new pictures to enlarge it, and work on it with more changes.  Save your pictures by making screen shots.

Mutapic is an online application. You do not need to install anything to use it. Mutapic should run in any browser using Flash (Java script should be on).

Here are screen shots I took while I was experimenting on the web site.

and here my favorite picture for this experimenting.  

I think this would be an interesting way to create art for a CD cover, or logos for a web page, or avatars or online profiles...