In Anodyne, you explore and fight your way through nature, urban and abstract themed areas in the human Young's subconscious, evoked by a 16-bit-era visual style and a moody, dream-like soundtrack. The player moves between rooms 160x160 pixels in size, an intended constraint that we used to create the monster-filled dungeons you will navigate and the set of nature-based (and sometimes stranger) places you will explore. Anodyne is on Steam Greenlight, please vote for it.
We're using this for one area in the game. Not this area, but it shows the filter well.
A static filter I made today for a later area of Anodyne (applied to an early area).
How does it work?
It grayscales the image to a set of N shades linearly between 0xffffff and 0x000000. Then, I used a partial implementation of this: En.wikipedia.org . For every pixel, I grayscale it, then I make a measure of the "error" in doing so (since I lose some information about the pixel's color when picking which of the N shades of gray to give it). That error is added to the pixel just below the current pixel, so that the colors change a little bit.
The amount of error I use changes every few frames to give that moving static effect.
Combined with some lighting, this can make the scene look very cool.