I discovered tilt-shift photography a few month ago on one of my regular haunts, the MacRumors.com forums. Someone had posted a video of what looked like stop motion model animation, but was of real life subjects. The video is amazing and well worth watching.
It was shortly after finding this that I went out and bought a nikon D40…
Disclaimer, none of these are mine (although they are hosted on my website, bandwidth theft is bad, mmmkay), click on the picture to go to the source I got it from.
As far as I know, the method involves either using a dismantled lens, an expensive/special lens, or photoshop/the gimp. The trick seems to be to reduce the depth of field, so the foreground and background are out of focus, as if you were using a macro lens very close to the subject, while actually using a wide lens at a distance (and preferably from a height).
There are hundreds of examples on the internet, I’m off to google some more of them.