I have recently read a few articles describing Procedural Generation of Textures and how the textures are stored in mathematical algorithms and generated for gameplay instead of being simply loaded from a flat image file. Has anyone ever actually used procedural generation? I'd like to learn a bit more about this, but there is a lack of documentation or tutorials on the subject. It seems that many games are heading towards this feature because not only does it decrease the filesize of the game, but it also makes the graphics and/or textures scalable (such as if I played it on an older system, the graphics would be less beautiful, but the game would run fine and if I played it on my brand new system, it will look gorgeous and run just the same). Thanks for any help on this subject!

Ask prof. Google for examples and explanations and follow interesting bibliographical references in the papers you have through researcher home pages and sites like Citeseer and ArXiv.
But probably you should develop your own game or demo with procedural textures and wait until you have some questions before looking for the techniques and ideas that apply to your needs; trying to learn "everything" is vain, and the coolness, novelty and scientific value of research have little to do with its relevance to specific applications.