(Like Alerissa's last post about Internet Explorer, this question also gets asked occasionally. Happened to me just this morning. The answer was on the old AS Arachne FAQ, but I couldn't find it here at AW. So here's my little 3 ses on the subject)

Who does it affect? AOL users
Who else? Non-AOL users who can't view images sent by AOL users.
Who else? Graphic gurus who work hard to make their art happen, only to find it altered, inadvertently changed, by AOL users simply trying to save and/or use them!
And who else? The whole planet, possibly the entire universe, because AOL is everywhere.

First, I'll try to explain what is happening and why. Then, let's rid you of this pestilence. Not AOL... the .art issue.

What is happening here?

You attempt to save a graphic from the web to your hard drive, but instead of saving the image as it really is (.jpg, .jpeg, .gif, etc.) you notice it only saves as an .art file. After this, another possibility~ An installed-defaulted graphics program (most notably one from Adobe, which is also attempting to take over the known universe) opens, and tries to save the image there, but either does not recognize the file-type .art at all, or tries to get you to save it in another format and you unintentionally modify someone else's (possibly copyrighted) art, without even knowing it. All you wanted was to save it and upload it.

What is the .art file extension, anyway?

Dr. Roland B. Herman describes .art as such~
" (it) is scattered all over the World Wide Web and is completely undocumented, and unknown to most users. It is also incompatible with practically all graphic image editors and paint programs. It is not mentioned in any manual or program of which I am aware, and if you try to use it with practically any application you will get an error message to the effect that “it is an unknown format” and cannot be read, or opened. And yet it exists quite commonly and pervasively throughout the Web. It has appeared on my own Web site although I did not place it there..."

What happened is this: Back when you installed your AOL, the .art came right along with it, because AOL is set by default to use compressed images. It's an attempt to get their notoriously slow browser to download image files faster, but results in their users viewing mushed-up web pictures. Many AOL users don't even know that the art they think sucks might not suck at all. (*laughs*) They are just seeing it as though it was put through the heavy wash-cycle, dried on high heat and then not ironed, courtesy of AOL. What happens changes the appearance of web artists' or photographers' carefully rendered work, as suits the branded AOL browser. And it's denying its users the chance to really "see" the world wide web as was intended.

The Good News: It can be fixed. But how?

Ten Steps To A Clearer, Brighter, More Beautiful Internet (for AOL users):

1) When you sign on to AOL, go to the AOL menu bar.
2) Select "Members".
3) Select "Preferences".
4) Select "WWW".
5) Click on the "Web Graphics" tab.
6) Uncheck "Use Compressed Graphics"
7) Clear your browser cache (clear your Temporary Internet Files).
8) If you didn't before the last step, disconnect from the Internet.
9) Reboot your computer and sign back on to AOL.
10) Wow. Hey... lookit that!

Refresh/reload your most often viewed sites, and the World Wide Web will be a clearer, brighter, much more beautiful place. Now you should be able to see, save and upload image files as they are... as was intended... without having to re-edit them or mistakenly change them in Adobe or some other graphics program.

External Links: What some others have to say about .art~

AOL's Art format: An evil plot to make the web look ugly by PrncssVi.

What is Graphic Extension .ART? by Dr. Roland B. Herman.

Issues that you may experience when you work with an .art file in an Office document by Microsoft.