As part of an RPG I made a bio picture of a character named Relex, a Denobulan conn officer. Since there were no other Denobulans apart from Phlox in Enterprise at the time, there were no nameless extras to use pics of, so I decided to create one myself using my own ugly mug as a basis. This was a lot of fun to do and I think it turned out pretty well, so I thought I'd take the opportunity to show other people how they can do their own with only basic knowledge of photoshop or a similar program(I used Adobe Photo Deluxe v1). It's well worth having a go at.
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Step 1: Source material [1-2]

Take a photo of yourself(or whoever it is you want the end result to resemble) and then find a photo of the person you want to turn your subject into. The closer the similarities between the composition of both pictures, the easier it will be.
For mine I took a screencap of Phlox when he was looking in a similar direction to me in my photo. Finding a photo of the character first would be much easier, but in my case my digicam was broken and the pic of me I used was the only one on my computer. Btw, I don't normally look like that, really. I was trying to look stern and moody so I could stick my head on a Starfleet uniform and look like a captain or something. I'm usually much more grumpy. And I have snazzy hair now.

Step 2: Editing [3-4]

Resize the pictures so the head's are more or less the same size. Put them on separate layers with the person you want the end picture to resemble the most at the bottom. Then use a soft edged erase tool to delete the character's eyes, nose, mouth, and other defining features so that the subject's features will show through underneath(hover over pic 3 to get a better idea of what I mean). The eyes are the most important part since they're our most identifiable features. Delete as much as you can get away with. Match the subject's skin to the same colour as the character's. You can use the hue/saturation or colour balance tools, but colour balance is more accurate, you can choose the exact colour you want and then use the saturation and brightness/contrast tools to make it a more solid colour.
If the features showing through from the bottom layer aren't lining up with the ones on the top then you can use the perspective, distort and resize tools to make them look more realistic and the move tool to align them correctly.

Step 3: Finishing [5-8]

It should be more or less finished now, but there might be some patches of colour that need cleaning up or some shadows in the wrong place. If you get areas that are too dark or light, you can use the burn/dodge tools to fix them. The last things I did were to add the background, make the uniform and change the hair a bit so my new character didn't resemble Phlox too much.

Later I made an animated gif of Relex blinking and added the pic to the bio page of the RPG site. I also used this technique to make a much simpler manipulation of the Queen and a Ferengi President Bush.