"Unknown graphics extension"

The LaTeX graphics package deals with several different types of DVI (or other) output drivers; each one of them has a potential to deal with a different selection of graphics formats. The package therefore has to be told what graphics file types its output driver knows about; this is usually done in the <driver>.def file corresponding to the output driver you're using.

The error message arises, then, if you have a graphics file whose extension doesn't correspond with one your driver knows about. Most often, this is because you're being optimistic: asking dvips to deal with a .png file, or PDFTeX to deal with a .eps file: the solution in this case is to transform the graphics file to a format your driver knows about.

If you happen to know that your device driver deals with the format of your file, you are probably falling foul of a limitation of the file name parsing code that the graphics package uses. Suppose you want to include a graphics file home.bedroom.eps using the dvips driver; the package will conclude that your file's extension is .bedroom.eps, and will complain. To get around this limitation, you have three alternatives:

This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=unkgrfextn