Yes, such a thing exists!  The "artworks" (many disagree in calling it artwork, see link at bottom of page) has been created by Kelly Heaton.  The wall peice consists of 400 Furbys, stripped of their skin and put on a wooden wall.  The Furbys were not just any kind of Furby, all 400 of them were Santa Furbys, apparently so all Furbys looked the same. There are 14 art pieces all together that include Furby as the subject in some way.

The finished piece is now on display at Bitforms in New York City for a limited time.  The Furbys begin to talk when an IR signal is bounced off a viewer back to them, so as the viewer walks in front of the display, the Furbys in front of the viewer will begin to talk and as the viewer walks along, more will begin talking. 

Furbys were chosen by the artist not because she is anti-furby, but because Furbys are a well known emblem of machine intelligence, which made them sutible for this project and the artist also wanted a reciprocal relationship between the viewer and the display.

My friend Blu visited Bitforms to view the display and was able to take pics of the display, which are featured below.  Writing in italics is by Blu her self. Click a pic to view bigger version of it!

For more discussion of the controversy regarding this show and other Furby controversies, visit Custom Visions: Altered Toys and click on the "Controversial Altered Toys" link.  Also, thanks to Canuck for imforming us of the show!  The gallery's website can be found here.
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This is a shot of the major piece in the installation called: "The Pool". Its a very strange ,but fascinating experience to be standing in front of this slightly curved smooth wall, with furby faces embedded in it.The wall, which DOES remind one of a pool because of the water molecule form of the furby face elements (2 eyes plus mouth=H2O), reflects your movements ..furby faces are activated and talk as you pass in front of them.They are activated by infared reflection off viewers bodies. This installation wall is being offered for $33,000. I asked the gallery owner about the fact that the pixels will all eventualy fail, rendering the wall silent and static over time.He said the buyer would be given a video of the wall as it was when functional.

These pics show the back of the wall, you can see the customizations done to the circuits of the Furbys in the close up (bottom pic)

Next I show the items in the second room of the gallery. You will notice that furby is treated here almost as a biological specimen..with its various parts dissected and diagramed and set among images of animal dissection illustrations. First (top pic) is a piece called "Pinned Anatomy"..all the pieces of furby laid out and pinned to a board. Next (bottom pic) are the dissection sketches from the back wall of the second room..animals such as rabbit ..and furby.

 

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This piece (top pic) I'm pretty sure was not shown in the gallery website..its called "Where am I?" and is selling for $3,500. Here is the text that was on the wall above it, bottom pic. I had a hard time reading it clearly, but think i got it all.
Text:
I peered through the glass.There, floating in what
looked like ginger ale,was my brain,though it was almost covered with printed circuit chips,plastic tubules,electronics(?..a bit unclear) and other paraphernalia.I thought to myself: "Well, here I am staring throught a plate glass at my own brain..But wait" I said to myself,"shouldn't I have thought,"Here I am suspended in a bubbling fluid,being stared at by my own eyes?"

These last 3 pics (top, right and below) are various drawings of Furby on display at Bitforms.
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