If you want to know more about CSS sprites and how to put them together, feast your eyes on Google’s:
Here’s the history of Google’s PNG sprite image

http://www.google.com/images/nav_logo.png
http://www.google.com/images/nav_logo2.png
http://www.google.com/images/nav_logo3.png
http://www.google.com/images/nav_logo4.png
http://www.google.com/images/nav_logo5.png
http://www.google.com/images/nav_logo6.png
http://www.google.com/images/nav_logo7.png
http://www.google.com/images/srpr/nav_logo8.png
http://www.google.com/images/srpr/nav_logo9.png

March 25, 2010 – http://www.google.com/images/srpr/nav_logo10.png

April 1, 2010 – http://www.google.com/images/srpr/nav_logo11.png

April 21, 2010 – http://www.google.com/images/srpr/nav_logo12.png

May 4, 2010 – http://www.google.com/images/srpr/nav_logo13.png

July 2, 2010 – http://www.seodenver.com/wp-content/uploads/HLIC/53708e94f618e796e88d30563dab0856.png
You can’t get much more efficient than that…
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Hey,
Check out the one I used on this site I built..
http://www.ficr.com.au
Although I stumbled across your blog searching for ‘image sprite SEO’ as I am concerned all the image replacement I have done is causing negative feedback from the google spiders….
Sam
@Sam Davies: The sprite is good, but consider breaking it into multiple sprites. Too large a sprite can make your site appear to load slower rather than faster. Maybe consider having buttons, navigation, and text sprites. You’re still at only 3 requests, but the images will be smaller and will be loaded as available.
In terms of search engines punishing you for it, they won’t; they’ll only punish you if you’re hiding spammy text in the text replacement.