This is very cool. The core of the code should be pretty simple, here's an article on how to play an image using windowed fft :

http://www.ohmpie.com/imageencode/

Then just add some standard chorus+reverb processing, possibly a bit of distortion.

There are other programs that do this kind of thing (Photosounder, MetaSynth), oddly not so much free software.

As a side note, it's kind of odd that the coloring in this gui lays out the light spectrum with the low frequencies in violet and the high frequencies in red.