Funhouse Photo Software
I just got a free copy of ArcSoft's Funhouse software with a digital camera I bought. I have been having a ball with this stuff. It comes with over 150 templates of pictures that have the faces masked out as invisable. You can easily insert faces from your own digital files - resize, flip and rotate the faces to fit the template. Some of the results are amazingly realistic - all of them are lots of fun.
You can also take any digital image and add transparent masks to make templates of your own.