It's been on reddit or hacker news before, this year iirc.
as the ajaxian article stated, i believe that people are trying to make use of it to squeeze the most out of the size-limited javascript contests that are out there. but, i've not seen an entry that does yet (haven't looked that hard though).
I think js10k limits entries to those only readable in UTF-8 which, I believe, a PNG (compressed or uncompressed) does not meet.
Tech demos or challenges, like what people are submitting for 10K Apart.