Indeed, the egg first presents itself as a smiling red jelly bean complete with antennae when the user repeatedly taps the Android software version in settings (this can be seen on the left). In the background is whichever picture you've chosen as your wallpaper. Then, if you long-press anywhere on the screen, countless smaller jelly beans will emerge (seen on the right). What's more, you'll also be able to flick these smaller jelly beans off the screen should your spirit so desire. Here's a video to illustrate:
Nice touch, Google! Let us know if you find any more hidden secrets lying around Android 4.1.