The original photos were taken by American photographer Richard Avedon in 1967 and then given a special treatment. The Beatles Bible website
has a little more information on it.
The effect on George's portrait is achieved by smudging the photo while the print is still wet. I've seen this done by a pro photographer.
Original portfolio of the photos, only a few were printed, sold at Christie's
for over $600,000
And here's a Wiki article
on the man!