I have the strong suspicion that both a dwarf's personality and his experiences influence what he'll engrave ... or that events are weighted in some way, and go into a pool for the engravers to select from.
My previous fort had a small standing army, invading goblins whose ambush squads had elves and dwarves in them, and a large squad of Engravers intended to make my future soldiers strong ... (they'd smooth and haul stuff to trade depots mostly; spar sometimes; engrave a lot)...
I used this engraver squad against an Ambush and then set them loose on my dining hall.
I swear 3/4 of the images were "Dwarf is striking down the Dwarf" or "Dwarf making a plaintive gesture, Marksdorf is laughing", with the occasional "Goblin in fetal position" from traps.
Currently, none of my engravers has ever seen combat, and I get a lot more images of dwarves (civ symbol), broad crosses (site symbol), election posters ("Image of [Mayor] ... related to ascension o leadership), "dwarf and dwarves" from founding the place, squares, or images of dwarves making engravings, artifacts, or Urist the cook raising a quarry bush roast. They do engrave "X striking down the goblin" sometimes, but not very often.
So ... I think - but can hardly confirm - that either a) DF saves a "spectacular event" whenever a dwarf gets killed, invader or not, and a slightly less spectacular event for goblins getting killed, and that engravers sometimes render an event from this history; or that b) dwarves like to engrave stuff they've seen, so if an engraver strangles two Goblin invaders with Dwarven genes, they'll engrave images of themselves killing dwarf invaders a lot.
Also I suspect that with increasing skill, they become less likely to engrave something someone hates (like toads, lizards, etc). Can anyone confirm? (e.g. my mayor hates toads, loves deer. I've found masterful "mayor embracing two deer" engravings, but a simple "mayor surrounded by toads, looks terrified" one...)
Funny ones ... well, apart from "boss embracing two deer", or "boss surrounded by frogs, Boss looks terrified" ... not much.
@Fist of Armok: There's two INI options I find helpful.
1) Show Engraving
By default, engravings are shown as the ASCII character that the image shows.
e.g. if they engrave dwarves, you'll have something dwarflike on that square on your map, permanent, so in the end my dining hall looked like a graveyard full of fresh bodies from all the engraved dwarf pictures.
If you find this confusing, like I do, change the INI setting "keep engravings hidden" or "engravings visible" (or somesuch). Then engraved walls will look almost like normal walls, and you can still view the engrabing's content using k.
2) By default, you'll see a short version of the text.
There's an INI option to activate full details ...
For simple ornaments (images of squares etc) there is no difference.
The additional text will however tell the background if there is one, e.g.
Normal:
"image of broad crosses", "image of a dwarf"
Extended:
"... image of broad crosses. This is the symbol of a local government"
"... image of a dwarf., the symbol of the [dwarf civilization]"
And for historical events, it will show almost too much text, especially after your fighers get the extra name from 5 kills:
Normal: "Image of a dwarf and a goblin. The dwarf is striking down the goblin"
Extended: "Image of 'Woodcut' Nomabzul the Winding Stairs of Bloodshed and Isuzu Doomedgills the Goblin. 'Woodcut' Nomabzul the Winding Stairs of Bloodshed is striking down Isuzu Doomedgills. This image refers to the killing of the Goblin Isuzu Doomedgills by the dwarf 'Woodcut' Nomabzul the Winding Stairs of Bloodshed during the Eigth Attempted Abduction in the mid-spring of 206."
It'll also tell you that most of the "dwarf surrounded by dwarves" engravings are about your mayor getting elected.