Note: Creating Pixel-Style Displacement in Blender

A tiny trick, really. Blender can do this with built-in tools.

How

• Add a plane, enter Edit Mode, and scale it up (just to make it easier to see the effect; any factor works, e.g. 8x)
• Subdivide 100 times (you need enough subdivisions for displacement)
• In Object Mode, add a Subdivision Surface modifier: set viewport subdivisions to about 3-4 (render can be higher)
• Add a Displace modifier and create a new texture
• In the Texture panel, set the type to Distorted Noise
• Set both Noise Basis and Distortion to Cell Noise
• Amount controls randomness of pixel size; Size controls overall texture scale
  • Texture settings:
    
• In the Displace modifier, use Strength to control displacement intensity

With the plane scaled 8x, subdivisions 100, Subdivision modifier 3, Displace Strength 0.5, texture Amount 1.5, and Size 1, the effect looks like:

Of course, using JSplacement to generate textures is more flexible. This is just one way to do displacement with Blender’s built-in procedural textures.