I came across this image (re-uploaded below) that seems to load with interleaving on.
However, instead of it starting out blurry and then becoming sharp, it appears to load in black and white, then a layer of green, then colored, and then a sharper version of the colored result.
For context, this image is of the recent Katmandu earthquake and I'm assuming this interleaving was chosen to convey the image's content quicker on slower connections (i.e. in more remote or less developed areas of the world).
Why does it do this? Are there multiple ways a JPEG image can be interleaved?
Yes, there's many ways JPG can be interleaved. Your example was probably specially encoded in sequential JPG compression instead of progressive.
"..There are tens of thousands different ways to produce progressive JPEGs, "progressive" is definitely not restricted to a single predefined way. For instance JPEGrescan conducts trials with different progressive configurations to reduce the file size, yes progressive JPEGs are often smaller than sequential ones. Even what is often called "baseline JPEG" ("sequential" is more appropriate) could be recorded in 13 different ways. 99.99% of sequential JPEGs use the single scan with 3 interleaved components scheme therefore JSK will only output a single scan_001.jpg file when it encounters one of these numerous sequential JPEG (it's not a bug, it's a sequential JPEG).
JSK produces between 1 and 3 scan images when the input file was a sequential JPEG, 4 scan images and more mean the input file was a progressive JPEG."
Image below has a progressive JPG on the left and sequential on the right:
Source: This site below explains in more details and with more examples how this can be achieved:
It's often used for very detailed and heavy JPG. It was a bit more popular for regular web images in the 90' because of the slow modems.
If you save a JPG in Photoshop (and not a "save for web") you will notice the last option is "progressive" and lets you choose how many scans you want.
But for your image sample, it was probably done using a special JPG codec.
If you want to read more about it: