I recently rewrote the cartogram algorithm in Python. It still has some issues, so I'm not going to put it up for general download. If you are interested, email me directly and I'll send you a copy.
The Python script uses the CGAL/OGR library to access the geometries in shapefiles. This is significant because it means you can run this script with free, opensource software. You don't need a license for ArcGIS to create cartograms!