I will discuss the work of Brendan Frey and Nebojsa Jojic on incorporating latent variables to model clutter and transformations when modeling image data using Gaussians, mixtures of Gaussians, component analyzers or mixtures of component analyzers.
They have published quite a few papers on this topic. The paper that I will discuss is a pre-print of a paper that was submitted to PAMI, but does not seem to have been published yet:
Brendan J. Frey and Nebojsa Jojic 2000. Transformation-invariant clustering and dimensionality reduction. To appear in IEEE Transactions on Pattern Analysis and Machine Intelligence, Submitted Nov. 2000. Paper.