How to get the effect? :o

I don't even know what you would call it...

I've been looking forever and i cant find anything about it. Yet this show uses it all the time and i love it.


http://www.youtube.com/watch?v=AqS5SeJOrwU
Its at around 6:50-8:00


Its the pixtilated melting thing going on. that's the best example i can find so any help would be appreciated ^_^