You can use this program to convert an Image to pure HTML. The generated HTML file can be downloaded as well.
I load the image in php and read it pixel by pixel and based on the pixel RGB value generate the appropriate HTML tag. To save the server bandwidth and cpu time, I limited the image type to GIF and Jpeg and the image dimentions to 400 by 300 pixels and the image size to 50KB.
You can try this cool application here. I hope you enjoy it.