I wrote something like that for an ARG.  Basically I used GIF images with sets of 2 visually identical entries in pallet and encoded bits by picking either the first or second.  Not quite as sophisticated as something like varying which dct coefficients to keep in a jpeg, but it was intended to be breakable with a hex editor.<p>The problem was that most image hosts were smart enough to detect the sub-optimal encoding and &quot;helpfully&quot; fix it.