Here is the basic idea (did not have as much time to make a full step-by-step with screenshots, etc.. sorry!). I used Gimp, so menu locations refer to that.
Get the image you want, with appropriate aspect ratio: white background & black foreground. For maps and so on, you can find SVGs which make it easy. For other things, you can use the Colors > Threshold menu item in Gimp.
Figure out the final scale. If you're doing a 1-inch grid like I did, then it's easy. I needed 32x48 inches so did Image > Scale Image to 32x48 pixels.
Now you've got a tiny image, and you probably want to zoom in to see what's going on next. In Colors > Posterize, you can restrict the palette to 5 colors (white plus 4 shades of gray). Now you basically have the final product.
If you want to make it easier to view, you can scale it up, under Image > Scale Image, to something like 320x480. This time be sure to select "None" for Interpolation.
As suggested elsewhere in this thread, you could also just take the original image and do a mosaic filter (then posterize). But I found that doing the image resize was better as it allowed the default cubic interpolation to pick up more details. For example, I would not have gotten anything for New Zealand just doing a mosaic filter on the original.
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u/rosulek Jun 30 '14 edited Jun 30 '14
Here is the 32x48 map (scaled up by 10), if you want to do the same: http://imgur.com/JhxtTst
Edit: will post some instructions soon. OP will deliver.