A player in Survival or Adventure mode picking up and dropping items modified by the /entitydata command can duplicate the items.
I made a quick little video, but I had to shove it on dropbox because of the 10MB limit
- Place a repeating command block, enter for example the following command (you can modify actual item entity tags as well) and activate it
- Place different variants of an item (for example different colored wool) in your hotbar
- Switch to Survival or Adventure mode
- Drop all items in your hotbar by either pressing Q or Ctrl + Q
- Select the first hotbar slot and keep pressing Q or Ctrl + Q
→ After some time you should see that the dropped items have been duplicated