Depending on who you ask, this feud started at different times. One thing that ICP point to as somewhat the beginning is back when Eminem was still a local nobody in Detroit trying to get exposure. He was having a little concert party thing going on and made flyers for it. On the flyers, under a category of "MIGHT Make An Appearance" was about 30 of Detroit's biggest local acts from Esham to House of Krazees to, yes, ICP. That flyer story you have heard is true. There is scanned pics of the flyer floating around the Internet. Hard to find, but they're there.
Anyway, the fued really got heated up in 1998 when Eminem took shots at ICP on the Howard Stern show. He was interviewing Eminem and asking him what his opinion was on other local Detroit musicians. He names off Kiss, Kid Rock, etc. and then, when he says ICP, Eminem replied by saying, "Who? Oh, them guys, yeah, we used to beat their asses all the time back in the day." or some such shit like that.
The next day, Howard had ICP on the show and told them what he had said, to which Violent J replied, "We don't even know that bitch!"
ICP hit the studio, along with Twiztid and a copy of Eminem's song "My Name Is" which Madrox, doing a dead-on Eminem voice, changed the lyrics to the song and dissed the hell out of Eminem. The song was entitled "Slim Anus" and got played on The Juggalo Show, Mancow's show, The Howard Stern Show, and eventually found CD release on Psychopathics From Outer Space.
Eminem responded with a diss on his album, The Marshall Mathers LP. On the song entitled "Marshall Mathers", he launches a verbal attack at ICP, saying:
Plus I was put here to put fear
In fags who spray Faygo root beer
And call themselves clowns cuz they look queer
Faggy 2 Dope and Silent Gay
Claiming Detroit, when y'all live 20 miles away
And I don't wrestle, I'll knock you fuckin' faggots the fuck out
Ask 'em about the club they was at when they snuck out
After they ducked out the back when they saw us and bugged out
Ducked down and got paintballs shot at their truck
Look at y'all runnin' your mouths again
When you ain't seen a fuckin' Mile Rd. south of 10
And I don't need help from D12
To beat up to females
In make up who may try to scractch me with Lee Nails
Slim Anus? You damn right, Slim Anus
I don't get fucked in mine like you two little flamming faggots.
Also, on the very next track, a skit entitled "Ken Kaniff" was a simulated gay sex track with J and Shaggy.
Later that year, Eminem found himself in trouble with the law 2 times in 2 days. One of those times involved him pulling a gun on Douglas Dail, otherwise known to juggalos as Dougie Doug. He is the brother of Psychopathic Don, Billy Bill. An altercation took place between them apparently, and Eminem pulled a gun out on Dougie. He was later arrested for it and eventually got probation or some shit.
It only added fuel to the fire and ICP responded that year on the 4th of July when the released the song "Nothin' But A Bitch Thang" on their website for free download. The song was a BRUTAL diss, tagging out to not only Eminem, but his wife and daughter as well.
During Eminem's Up In Smoke Tour, part of Eminem's stage act included 2 blowup dolls painted up like ICP in which he put them in gay positions, kicked em' around, etc. etc. Also, in one of his newest songs 'Business' the chorus says:-
"Let's get down to business,
I ain't got no time to play around what is this?
Must be a circus in town,
Let's shut the shit down on these clowns,
Can I get a witness."