.png file

A .PNG is a Portable Network Graphics file, an extensible file format for the lossless, portable, well-compressed storage of raster images. PNG provides a patent-free replacement for GIF and can also replace many common uses of TIFF. Indexed-color, grayscale, and truecolor images are supported, plus an optional alpha channel. Sample depths range from 1 to 16 bits.
PNG is designed to work well in online viewing applications, such as the World Wide Web, so it is fully streamable with a progressive display option. PNG is robust, providing both full file integrity checking and simple detection of common transmission errors. Also, PNG can store gamma and chromaticity data for improved color matching on heterogeneous platforms.

The PNG format provides a portable, legally unencumbered, well-compressed, well-specified standard for lossless bitmapped image files.
Although the initial motivation for developing PNG was to replace GIF, the design provides some useful new features not available in GIF, with minimal cost to developers.

GIF features retained in PNG include:

Indexed-color images of up to 256 colors.
Streamability: files can be read and written serially, thus allowing the file format to be used as a communications protocol for on-the-fly generation and display of images.

Progressive display: a suitably prepared image file can be displayed as it is received over a communications link, yielding a low-resolution image very quickly followed by gradual improvement of detail.

Transparency: portions of the image can be marked as transparent, creating the effect of a non-rectangular image.

Ancillary information: textual comments and other data can be stored within the image file.
Complete hardware and platform independence.
Effective, 100% lossless compression.

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Maxwell is right. I just wanted to add that I create .png files regularly for web graphic development. I use Macromedia Fireworks to create vector graphics, which are very easy to go back and edit. You can create wonderful text effects and easily change them when the file is in .png format.

Unfortuately browsers don't read .png files like .gif and .jpg. I think the browser plug-in is Quicktime. This is why I have to export copies of my .png files in .gif or .jpg format to be used in webpages.
-lisa