  We study the morphological evolution of strained heteroepitaxial films using
kinetic Monte Carlo simulations in two dimensions. A novel Green's function
approach, analogous to boundary integral methods, is used to calculate elastic
energies efficiently. We observe island formation at low lattice misfit and
high temperature that is consistent with the Asaro-Tiller-Grinfeld instability
theory. At high misfit and low temperature, islands or pits form according to
the nucleation theory of Tersoff and LeGoues.
