Ok yeah wow, hiptext's output looks pretty fantastic. :)
I'm using my own text webcam thing: https://github.com/dhotson/txtcam .. not too fancy, just using greyscale with some shading characters to do some basic "dithering".
Also, if you're on Mac OSX and using iTerm2 version 3, you might be interested in its 24bit colour support. It's not that widely supported yet in other terminals unfortunately though: https://gist.github.com/XVilka/8346728