A "Claytronic atom", or "catom", is a nano-scale object, covered with electromagnets capable of attaching the catom to other catoms. LEDs, and photo-sensors on the surface complete the picture (no pun intended). A suitably programmed ensemble of catoms could dynamically replicate just about any object - even a person. Some have called it "dynamic physical rendering". Whatever you call it, the technology is probably a decade off (famous last words).
Carnegie Mellon University researchers Seth Goldstein and Todd Mowry lead the small, DARPA and industry-backed research team that is investigating the engineering of these devices.
References
Synthetic Reality (CMU Group)
Programmable Matter (Pittsburgh Post-Gazette)
Presentation at IC Fall 2004 (.pdf)