PNG stands for Portable Network Graphics and was originally designed to replace the popular GIF format. PNG is much more sophisticated than GIF -- it supports 24- and 48-bit images, while GIF supports only 8-bit images. PNG can support RGB, Grayscale, or Indexed color image modes. You can also have varying levels of transparency in a PNG image, something both GIF and JPEG cannot do. The downside to PNG files is that the color images are often larger than GIFs or JPEGs because they contain more colors than GIF and do not have the advantage of JPEG's great compression scheme. Therefore, the PNG file format is good for small images, such as buttons and thumbnails with details.