i'm not sure exactly what to call this effect, so i just called it what i did.
1) choose an image you want to use, i'm going to use this one
2) create a blank layer above the background layer, go to select > all
3) after it has been selected go to edit > stroke, set stroke to 1 pixal, any color
4) select > deselect. grab your magic selection tool(make sure the "use all layers" box is unchecked) and click in the middle of the layer, this will select everything inside your stroke. select > modify > contract, set to six pixels
5) layer > merge visible, do not deselect, hit "q" to enter quick mask mode, there should now be a red border on your image, like this:
7) filter > pixelate > color halftone, set radius somewhere between 4 and 8, and set everything else to something under 30, negatives work pretty well. i used a 6 radius and all -10's
8) now hit "q" to exit quick mask, don't deselect. layer > add layer mask > reveal selection
9) now just save it as a .gif and your done.