An Acronym for Portable Network Graphics. Pronounced "ping".
A modern, losslessly compressed bitmapped graphics FileFormat, designated by the W3C as the successor of the GIF format. PNG is completely unencumbered with patents and licensing fees. This is important, as GIF has had problems in that regard (see Unisys). There is builtin support for PNG in Mozilla and Opera.
Recent versions of InternetExplorer display PNG images as well, however this browser does not support alpha channels natively. MicrosoftCorporation explain how to use it anyway. Not surprisingly, their approach to this hideous hack is completely incompatible with every other browser on the world, you should use a slightly different method. Thankfully, the upcoming InternetExplorer 7 has had PNG alpha-transparency support added.