There should be a clear distinction between two different kinds of ASCII art.

The examples in from The Jargon File are the traditional ASCII art, crafted by hand on text editors or even specialized programs (yes, someone writes that kind of stuff). The simplest example would be a smiley.

On the other hand, there are programs that will turn pictures into ASCII art. Those are further subdivided in two. The first ones start with two colour images and try to reproduce the shapes there with ASCII characters, like that on Cappie's writeup. The other kind takes a greyscale image and converts each pixel to an ASCII character, depending on its intensity; shame you can't see the four-sheet Michelle Pfeiffer poster in my bedroom, made by a self-made program.

I guess that the former (hand made) would be the purest ASCII art form. It is surely more difficult to create and the traditional crowd prefers it to the automatically made stuff.