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Screensavers are a defunct technology which protected CRT monitors from "burn in" - a flaw in the CRT's design which would "burn" a static image onto the screen permanently if it was displayed for long enough (12+ hours). A monitor affected by burn in could still be used to display other images, but a ghostly imprint of the burnt in image would always remain.
Modern LCD screens do not contain this flaw, and are also able to be put into standby mode, further eliminating the need for a screensaver.
Screensavers are still used for Ricing and nostalgia.
After Dark were the kings of screensavers back in the Windows 3.1 era. Their most famous screensaver was the Flying Toasters, but they had many, many more, including a "Twisted" pack full of comical gore and a fully licenced Simpsons pack.
After Dark can still be run via Windows 3.1 in DOSBox.
Digital rain is the classic Matrix screensaver where green characters fall against a black background.
At the height of The Matrix's popularity it was very common to find digital rain screensavers infected with viruses, often distributed via P2P filesharing applications such as KaZaA and eDonkey2000.
- GNU/Linux has had a digital rain screensaver, GLMatrix, as part of it's xscreensaver package since 2003.
Users can create their own "sheep" designs by hand, but Electric Sheep will also meld together different designs on it's own. The animation frames are rendered by users of the screensaver while it is running. This can be opted out of.
The creator of it is still trying to make money out of it, even through it's been around for over a decade. This means that the animations are rendered at a relatively low resolution by modern standards so that he can sell higher res versions (which nobody buys).
It is possible to render the sheep at any resolution on your own. Once in a blue moon someone tries to organize people onto a third party, high resolution server, but so far these have all failed.
Even at the low resolution, it's still a pretty impressive screensaver.