I believe that credit can be given to Greg Tate for coming up with the idea. He is responsible for these beauties:
Cornell University has done quite a bit of work in this area, including a video series. This is the first, which is a time-lapse video:
This page has many more videos in the series: Cornell University Living Sculpture, and these pages have more info and links.
For those of you considering making a piece of sod sculpture, I suggest that you visit Cornell's blog, as they have also followed it up with an article title Sod Furniture Revisited: Some Lessons Learned
Instructions for a sod chair can also be found at the bottom of this page at Rumble Pie.