This video of an amazingly camouflaged octopus revealing its true colors blows my mind over and over. From a description of these "sea chameleons" on PBS's NATURE site:
The secret behind (octopuses') color capability is special skin cells called chromatophores. Each chromatophore consists of three bags of pigment. By squeezing or expanding the bags, octopuses can change the color displayed by each cell, allowing millions of subtle combinations. And since each cell is controlled separately, they can create remarkably sharp displays. In addition, reflective coatings under the cells help enhance the effect.
UPDATE: More on the reflectors in Octopus skin Link
UPDATE: BB reader Jason Robertshaw of Cephalopodcast.com informs me that the video was shot by professor Roger Hanlon of the Marine Biological Laboratory in Woods Hole, Massachusetts. Link