Morphing is a well known technique used in movies/animations for transforming one object in to another, it is done is such a way that the transition from one object to another happens seamlessly. Different transition objects are plotted which finally transforms the initial object to the resulting object. But morphing itself is a very old term which basically means transformation of the physical shape of an object. (Example is the metamorphosis from larva to butterfly - photos). Human morphing techniques evolved in a big way from the wright brothers era, air craft making.
Below is a morphed video that depicts 500 years of female portraits in Western art, from DaVinci to Picasso. (click on the image below and activate the Youtube control by clicking on the same)
windows server 2008 - this URL portrays morphed images
Morphing techniques are used for creating GIF images, to complex imaging and morphing techniques that are used in movies like terminator. Morphing photos has made people interesting and fun (hence morphing software finds a place in cell phones and hand held devices) . More morphing videos - click here