What is it?
Generating terrain, clouds and textures from smooth random functions (Perlin noise) summed over octaves (fractal Brownian motion). Smooth interpolants (, with zero first and second derivatives at the ends) avoid visible grid artefacts; analytic derivatives give normals for lighting.
Formulas
The mathematics behind it
Fractal noise (fBm: octaves of Perlin noise) generates terrain, clouds and textures in games and films.
This page has the essentials. A fuller treatment (intuition, formal definition, worked example) is on the way.