Hi! I would do it in illustrator CS.
Go to Object>Live trace and then make. You can do some experiment to achieve what you want. Note: You can clean it up in Photoshop by adjusting the contrast so that you don't have the in between gray stuff . Photoshop>Image>adjustments>brightness/contrasts.
Good luck

Try using Vector Magic. It might be better to use black and at least one tone of gray.

This makes no sense to trace. There's so much detail it'll be much better presented as a bitmap.

@frode frank

What if I want it to be clearly legible at all scales from A1 to small business card?

Look at Illustrator brushes, you wont get the depth os shade with a single layer but you could reproduce a image similar to the above with a few different layers. Although as Frode says it will look better as a bitmap.

However clear it is it might stop looking like a pencil line when enlarged too much, or reduced for the business card for that matter.

How about an outline trace copied to PS and a few layers of noise and gradients. I can give it a try, if you're interested. Or yes, a brush in Illustrator.

Thanks guys, you've been a great help.

I played around in Illustrator and looks okay. I still have to print and see it though.

I beg you need it to design a font…
Fonsmith done it well (in my humble opinion)
http://www.fontsmith.com/fonts/fs-sammy.cfm?fontFilter=56

Related (although much more simplified):
http://www.flickr.com/photos/48413419@N00/4317579688

hhp

Nice amp ...sans texture.

Perhaps Claire could find a better method of maintain the tonalities by creating two (or even better three) traces using the lighter tonal one(s) to knockout what's needed from the darker tone.

n.

Just save it as a bitmap tiff in photoshop.
IMAGE>MODE>GRAYSCALE
IMAGE>MODE>BITMAP
Save as > TIFF

Now drop this file into illustrator,
you can change the color easily and enlarge it to any scale.

i had to do this recently and it turned out like this
http://farm9.staticflickr.com/8202/8285455065_491d064004_b.jpg

Coreldraw has the best auto tracer ever. You'd be able to fine tune how big of specs you would like in it, as well as how much or little smoothing you'd like, and a host of other things. I've never really seen anything else that comes close to it, if only it had an option for making certain line segments straight when they are close enought already being straight (handy when tracing the flat parts of letters) I would never use anything else. I believe Coreldraw 12 and earlier versions are free now.

You could do the same thing as hrant's Flickr image in Illustrator and use vector texture to give that spotted look.