PNG is a bitmapped image format that employs lossless data compression. PNG was created to improve and replace the GIF format.
Advantages
PNG uses a non-patented lossless data compression method known as deflation so all of the original image data is preserved. On most images, PNG can achieve greater compression than GIF.
Filesizes are typically smaller than GIF
PNG gives a much wider range of transparency options than GIF, including alpha-channel transparency. Alpha blending allows one to use anti-aliasing--creating the illusion of smooth curves on a grid of rectangular pixels by smoothly varying the pixels' colors--to make rounded and curved images that look good against any background, not just against a white background (for example). Thus the same image can be reused in many places without the "ghosting" effect that occurs with GIFs.
Original Image
GIF with Transparency
PNG with Transparency
PNG gives a much wider range of color depths than GIF (truecolor up to 48-bit compared to 8-bit 256-color), allowing for greater color precision, smoother fades, etc.
Disadvantages
PNG does not support animation.
Older web browsers (like Internet Explorer 6.x) have trouble displaying PNG correctly
