One of these days, if I'm ever bored and just have nothing else to do, I've always wanted to screw around with cellular automata built on a similar principle, where something triggers the cells to subdivide and/or unsubdivide, and there's some sort of flow back and forth between the levels. Seems like some interesting things might happen. (I've also thought the subdivided cells might run at a different time scale, too.) Not infinitely recursive, but similar in idea, I think.