Anti-aliasing is a process where the edges of images and fonts have pixels added to blend the edge of the item into the background. The goal of anti-aliasing is to make the fonts and images appear less jagged on a computer monitor and make the curves smoother. Another term for this is font smoothing because it is primarily used on fonts to make them appear smoother.
Anti-aliasing can make fonts and GIF images with rounded edges appear smoother, but they often result in a feathered or fuzzy halo around the image unless it is done extremely well. Anti-aliasing can make fonts harder to read on the screen because it reduces their crisp edges and blurs the serifs together.
When to Use Anti-Aliasing
Use anti-aliasing on GIF images with rounded edges and on large font sizes (14px or larger). Be sure to check your images and look for fuzziness after you anti-alias the edges. I recommend that you don't use anti-aliasing at all unless the pixel "stair-stepping" is very obvious in your image. Displays have very high resolutions and so should make the pixelation that anti-aliasing is trying to mitigate less apparent.
Never use font smoothing or anti-aliasing on fonts smaller than 10px. This makes them even more difficult to read.
