Torhal has submitted an amazing video of a shader mod to our videos section. Shader mods change the way that blocks are rendered on the screen, and this one twists and rotates the image for the user, creating a psychedelic effect. Warning: Watching this may cause nausea.
To achieve the effect, the GLSL Shader Mod was used, as well as a custom shader which you'll need to set up yourself. From the video's description on doing that:
Digital Diamonds is an ongoing look at Minecraft-related videos that have been submitted to the Minecraft forum video section. We'll be selecting videos resonating with the community to share with everyone on the front page.