As Shripriya pointed out, Facebook has made some changes in their layout so you now need to follow a slightly different route to create that grid of friends.
Open Facebook, go to Friends -> More.. and then select "–" from the drop down.
What you have now on the screen is a large collage of all your Facebook contacts. Capture this as a single image using this screen grabber, then convert this vertical image into a wide horizontal image using some image editor and set it as a Twitter background.
Alternatively, you can download that Facebook page with images to your hard drive and create a more interesting collage from scratch using Picasa.