This effect seems to be observed with almost any word. I would say this phenomenon 'works' for longer and complex words better.
When we repeat a word over and over again, it starts to sound very weird and become only a bunch of repeating sounds. You don't even need to repeat it quickly.
Why does a word repeated many times lose its meaning and the brain can't recognize it properly any more?
This is called semantic saturation, or semantic satiation; studies of event-related potentials (brain waves) suggest that it is negatively correlated with N400 amplitude (the subjective experience of satiation increases as the N400 amplitude decreases) without any change to upstream sensory components. As N400 amplitude indexes initial lexical integration--that is, understanding the word at hand in relation to the words that preceded it--this sugggests that semantic satiation is in fact due to some kind of habituation in the semantic processes, and not in upstream sensory processing.
Citations: Wikipedia on Semantic saturation
The accepted answer by @krysta may not be the full story: it depends on the way words are repeated.
I understand from @tsykora's question that words are repeated without a separation (syllables are produced at a fixed pace). Kounios et al. used spoken words (mean length of 544 milliseconds) that were repeated several times at a fixed interval of 800 milliseconds. This means that blanks (no sound) separated each presentation of a word.
The blank period between words is of importance since repeated words in a blank context may not "sound very weird" (words are clearly, physically, separable) but only loose their meaning. In a no-blank context (continuous speech), both meaning and percept change. An auditory example can be found in the "ILLUSORY CHANGES OF REPEATED WORDS: THE VERBAL TRANSFORMATION EFFECT" section (http://www4.uwm.edu/APL/demonstrations.html). For instance, while listening to repetitions of the word "rest", listeners are likely to switch between perceiving it as a repetition of "rest" and "tress" or "stress" (Warren & Gregory, 1958).
The verbal transformation effect originates in a multistable representation of a speech form. Pitt and Shoaf (2002) argues that one possible cause is the perceptual regrouping of the acoustic elements that make up a word. It involves some top-down processes in the perceptual organization of speech. A visual analogue of such illusion is found in the Necker cube where the percept changes according to where the eyes land (http://en.wikipedia.org/wiki/Necker_cube).
Such acoustic phenomenon makes me think of a statistical learning in language acquisition in children. It has been shown by Saffran and colleagues that a child can learn to segment a continuous speech into distinct words using transitional probabilities between syllables. In the context of repeated words, a word boundary is first placed between "ted-re" of "re-pea-ted-re-pea-ted" because "ted-re" is not frequent in English while the two other transitions are frequent. Going further in the auditory sequence, repetitive presentation of an utterance promotes alternative groupings of the acoustic elements because the elements occur at regular, predictable points in time (Bregman, 1990). Here, repeating a word at a fixed syllable pace abolishes the frequency of the syllable transitions (the frequencies are momentarily all equal) so that "pi-a-no-pi-a-no" is sometimes heard as "piano" and sometimes "anopi".
Ref.
Bregman, 1990. Auditory scene analysis: The perceptual organization of sound.
Kounios et al., 2000. Memory & Cognition ; http://www.psychonomic.org/pubmed/mc/mc-28-1366.pdf
Pitt and Shoaf, 2002. JEP:HPP ; http://lpl.psy.ohio-state.edu/documents/PittShoafVTE-17_000.pdf
Warren & Gregory, 1958. An auditory analogue of the visual reversible figure, American Journal of Psychology.
