This effect keeps track of several hotspots. The hotspots move a bit every frame. The program draws an interesting bitmap to a bitmapdata at these hotspots. Then it partially erases the bitmapdata with a cloudy noise texture (but only slightly). This means the drawing fades away in an interesting, multi-frequency way.

Thinking about bitmap source art, different kinds of particle motion, and different ways blendmodes work is key to knowing how to tweak an effect like this in interesting ways.

Download the source for this file here. You might need to right click and select "Save As". This file was saved in Adobe Flash CS5, and uses Actionscript 2.