No, 'recycled' in this context does not mean it's been literally peeled off an old lady's living room walls and scrubbed down a bit for re-sale; it's the paper that's from 100% recycled sources, and the gorgeous new design is printed in non-toxic vegetable ink.
The birdcage design by Woods & Fields comes in two colours and is available to buy at Modify. If you like this look you might also want to check out Interactive Wallpaper, a UK site that has some gorgeous recycled paper base wallpapers.
Technically "literally peeled off an old lady's living room walls and scrubbed down a bit for re-sale" wouldn't be recycling, it would be reusing.
Hi - I read somewhere that most wallpaper has traditionally been made from recycled paper, but the manufacturers didn't let on to customers as they thought it sounded cheap. But good for them for using non-toxic inks...