The Thatcher effect or Thatcher illusion is a phenomenon where it becomes more difficult to detect local feature...

The Thatcher effect or Thatcher illusion is a phenomenon where it becomes more difficult to detect local feature changes in an upside-down face, despite identical changes being obvious in an upright face. It is named after British former Prime Minister Margaret Thatcher on whose photograph the effect has been most famously demonstrated. The effect was originally created by Psychology Professor Peter Thompson in 1980.

The effect is illustrated by two originally identical photos, which are inverted. The second picture is obviously altered so that the eyes and mouth are vertically flipped, though the changes are not immediately obvious until the image is viewed in normal orientation.

This is thought to be due to specific psychological cognitive
modules involved in face perception which are tuned especially to upright faces. Faces seem unique despite the fact that they are very similar. It has been hypothesised that we develop specific processes to differentiate between faces that rely as much on the configuration (the structural relationship between individual features on the face) as the details of individual face features, such as the eyes, nose and mouth. When a face is upside down, the configural processing cannot take place, and so minor differences are more difficult to detect.

This effect is not present in people who have some forms of prosopagnosia, a disorder where face processing is impaired, usually acquired after brain injury or illness. This suggests that their specific brain injury may damage the process that analyses facial structures.

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References:
http://scienceblogs.com/mixingmemory/2006/09/23/cool-visual-illusions-the-marg/
http://www.bbc.co.uk/bang/article_thatcher.shtml
http://en.wikipedia.org/wiki/Thatcher_effect