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In Mac OS X, an alias is a pointer file that makes it easier for you to quickly open the files, folders, servers, or applications that you use most often. When you double-click an alias, the operating system finds the file to which the alias is pointing and opens it. You can tell an alias from a normal file or folder by its icon, which has an arrow in the bottom left corner. Once you create an alias, it will always open the original item, even if the item has been moved or renamed. The link between an alias and its original remains functional until the original is deleted, or minor hard disk errors cause the system to forget the original file's location. At this point, the alias is broken and should be deleted and recreated.
Originally posted by Blogstalker
What is an extension?