One of the new innovations in America On-Line's Instant Messenger client for Windows and Mac OS, this lets you specify a small graphic file (including the dreaded animated GIF) to be your "icon". It currently serves no purpose other than taking up valuable screen real estate in the lower-left corner of the window. There isn't an option to set it as the window's own icon for easy recognition in the Alt-tab list or Taskbar.
Perhaps the funniest part about it is how, when a buddy first offers you his/her icon, you are treated to a very pixelated icon. You can then sharpen it, bit by bit, before accepting it. The idea is that a graphic file of 32x32 pixels might be offensive, and AOL certainly does not want you to get offended. Fortunately, this dialog can be disabled so that your friends' icons show up automagically.