Please note that I haven't actually DONE this yet, but I saw the show on HGTV, Crafters Coast to Coast, and they did this on a segment. Have your mold; melt clear glycerine in the microwave and pour it into the mold, only halfway. Let cool/harden. Place prepared picture transparency (see below) on the hardened glycerine (still in the mold) and then pour more liquid glycerine to fill the mold. Cool/harden, carefully remove from mold, voila!
To prepare the picture/transparency - scan your picture and print onto a clear transparency sheet. Cut the picture out and laminate it (waterproofs it) with either a Xyron machine or I think there's sheets you can run through your printer to do the same thing.
I can't wait to try this!