Just strolled onto this post: “Converting a colour photo to a single layered stencil with Photoshop” (via furl.net) and I thought: you don’t need no friggin’ Photoshop to do that! Let me show you how it’s done with (free) Irfanview (Windows):

START
We start with the same picture as the Photoshop procedure above (actually I blew it up to 4x the size, double width, double height):
Start

STEP 1: convert to grey
Use ImageConvert to Greyscale:


Greyscale

STEP 2: adjust contrast
Use ImageEnhance Colors... and set Contrast to 100. Then set Gamma to a ‘suitable’ value (e.g. so that background is all very dark or all very light, so that shadows in the face are dark enough to show up in the next step). I used .19 as Gamma:
Enhanced contrast

STEP 3: convert to pure black/white
Use ImageDecrease Color Depth... to convert to 2 colors. You have an option to use Floyd-Steinberg dithering, this will simulate levels of grey by using a mix of black and white pixels.
The result with dithering:
with dithering
The result without dithering:
without dithering

Which is quite similar to the result of the above Photoshop tutorial from stencilrevolution:
Photoshop stencil.
The only tricky part is the application of contrast/gamma: that takes some practice to get right. There it is: using a $0 software to do something you can also do with a $650 software.

See detailed photo album here: http://www.pixagogo.com/0088695347