Pre-reverse-encription IIRC. Use a reversible algorithm to make some encrypted null text transform into readable strings. Since it's encrypted, a portion of it tells the graphic/sound file to skip the section, or on more modern methods, the software does it automatically. Similar to the DRM signing the is done on iTunes and Zune and other systems, except it ensures the the binary data is reverse-encrytped.
So if I feed "I love you" into an encryption, I'm likely to end up with some random garbage. For instance, in md5 encryption, "I love you" is "e4f58a805a6e1fd0f6bef58c86f9ceb3" in Hex, but might show up in any number of other ways using various encryption methods. Since md6 uses base16, you find an encryption method that uses base26, or better base128.
While most logical things would equal something insane that looks like the gibberish you see in most files, SOMETHING mathmatically would equal "I love you". Find that snippet of text using a hash table, and insert it into an already encrypted file, and you got a file that now contains the text you want.