Once you've chosen the image you want to use, vectorizing is simple using programs such as Adobe Streamline, Tracer 2.0, Macromedia Freehand or CorelDraw.
With a few minor adjustments to the node density and tolerance you can quickly create a vector outline which you then can apply color to.

Add a little color, perhaps a few blends here and there and...Voila!

Now you've got a compact, resolution-independent color EPS file which you can enlarge to wall size without seeing those bitmap 'step' edges.