just posted this on flickr too, but it is an artifact of the jpeg compression scheme. I'll see how much of this I remember form class now.
this can be reduced to a black and white image for simplicities sake, then every pixel is a value representing the intensity of a pixel. now if you take a loook at just one row of pixels and look at it as a graph on intensity with respect to time(actually column in this case) we can see that its actually a fairly simple step waveform, now any waveform can be created by the addition and subtraction of other smaller waveforms(wavelets I think they call them) , based on that, if we had an infinite number of cosine waves, we could perfectly represent the original wave we had, unfortunately, storing that much information is .... impractical
(ie. you'd need an infinately large hard drive to store any image) so some smart people got together (the jpeg group- Joint Photographic Experts Group) and said "hey, the human eye isn't perfect, so if we can retain enough of the signal to fool the human eye thats good enough" and thats what they went on to do, so because of that we don't QUITE match the original waveform and we get som artifacts, in a black and white image like this one you can see them, if you zoom in close enough of color images on a white background you can sometimes see it around the edges.
dunno how much sense any of that made, and I'm reaching back into the dim recesses of me memory of my image processing class, so there may be more than one error in there.