Any process which operates on itself, or the results of its operation, is recursive. This is one of the most powerful system dynamics.
When you get mad at yourself for being mad at yourself, you can tell it's pretty bad, and when you're celebrating because you're celebrating, it's hard for things to go anywhere but up.
Vicious cycles and virtuous circles
Doctor Who's Tardis inside itself
Also see http://ourpla.net/cgi/pikie?ReCursion (offline, see:)
Recursion: If you get the point, stop, else see ReCursion.
(also see InfiniteRecursion)
http://xkcd.org/446 (see the title text...)
In computer programming, recursion is when a function calls itself in the process of accomplishing it's task.
Or consider listening. Say you have a friend who's struggling with something and you want to help by listening, but you have so many things going on in your own life that you're not sure you could listen well. You might first spend some time getting someone else to listen to you for a while.
Great list of self-referential sentences:
http://www2.vo.lu/homepages/phahn/humor/self_ref.htm
See ScienceAndTechnology, SecondOrderCybernetics, OpenSpaceOnOpenSpace
