Movie Pixel Indexed background textures are a cool paint synthesizer feature i think a lot of people aren't aware of. I've tended to use them more for creating hatching patterns as opposed to photo mosaic work. But i've recently been playing around with this feature for photo mosaics and it's actually pretty powerful for that use as well.
The Circle Hatcher1 paint preset in Default : General is a good example of how to use a movie pixel index background texture to generate pixel accurate hatching patterns.
The different between a normal movie background texture and a pixel index background texture is that the frame indexing modulates on a pixel by pixel basis for the pixel indexed case. For a normal movie background texture the frame indexing only runs for one complete background texture cell, which would be the size of the actual movie frame.
There's a short tutorial on the use of movie pixel indexed background textures that will be appearing on the Studio Artist news blog in a few days.