The eye is very, very good at seeing things that we've evolved to see. [link|http://en.wikipedia.org/wiki/Cone_cell|Cones] and [link|http://en.wikipedia.org/wiki/Rod_cell|rods] in the retina have different sensitivities, so a lot of "image processing" is done before the electrical impulses even hit the optic nerve.

Once the impulses reach our brains, specialized regions take over interpret what we see. While we probably don't have [link|http://en.wikipedia.org/wiki/Grandmother_cell|grandmother neurons], I wouldn't be surprised if a very small number of neurons were involved in such recognition. I don't know about you, but there have been times when I've seen someone far off in a crowd, someone who I hadn't seen in years, yet I instantly had the feeling I knew that person even if I couldn't make out their features clearly at a distance. The human brain is staggeringly good at recognizing faces.

Oh, and I'm not sure that the digital camera folks aren't catching up very rapidly with what we're able to do. E.g. [link|http://www.canon.ca/digitalphotography/english/ctech_article.asp?id=208&tid=6|Canon's Digic II Processor].

Cheers,
Scott.