These electric sheep are bred using a screen-saver like application, just like SETI@home.
The electric sheep are fractal like images, but they do actually evolve from a rudimentary form of DNA.
So far, so good, but the real fun thing is that the server code is written in Perl!
On the electric sheep site, we can read the next comment:
"The server version 2.3 source code tarball contains 3900 lines of multi-threaded perl. The flame library, the expat XML parser, and the mjpegtools mpeg2 encoder must be installed separately."