In the upcoming version of Photoshop there is a feature called Content-Aware fill.
This feature will fill a selection of an image based on the surrounding image - to the point it can generate bushes and clouds while being seamless with the surrounding image.
See http://www.youtube.com/watch?v=NH0aEp1oDOI for a preview of the Photoshop feature I'm talking about.
My question is: How does this feature work algorithmically?