The emoticons are done locally. When you send a colon followed by a right parenthesis : ) , AIM automatically replaces it with the smiley face. This process is done on both computers. If you are using a 3rd party client, such as GAIM, which can be configured to not replace the text with icons, you see nothing on your side, however, the person you originally messaged still sees the same icon since it is being replaced locally on their side.