Pixelate

Step one

Choose an image you'd like to use.

Step two

Before reading this step, first decide whether you're going to pixelate the whole image or only an area. If you're going to pixelate the whole image then skip step two and three.

Get your freehand tool and choose the Point to Point:

Step three

Now carefully outline the area you'd like to pixelate.

Step four

Then go on Effects>>Distortion>>Pixelate.

Step five

Now you can adjust your settings to mine, or change them. If you set the number higher then it will be more dramatic. Less it will be less dramatic.

Outcome

Press "Ok". Before finishing I duplicated the background to HardLight, and added a border.