[jplur]

I believe it was originally displaying extended ASCII in a nCurses console, and switched to bitmaps with SDL. The majority of the world is still visualized by those character codes and two colors, but entities can be assigned arbitrary sprites http://i.imgur.com/zuMdqbv.jpg

[db48x]

Actually it was the other way around. It was originally a graphical game which deliberately used a set of bit-mapped tiles drawn from the CP437 (not ASCII!) font found on many old computers. It later grew the option to add in extra graphics, so that a dwarf or a cat is a picture of a dwarf or a cat rather than a colorized letter. In this mode it's actually an OpenGL game, although it doesn't do much with the hardware.

A release or two back it gained a true console mode which you can play on a real terminal.