Ah, a nibble.
My answer (read: my opinion) is that art is defined by human intent. If something is intended as art, it is art. If it is not intended as art, it is not art.
Interesting points this brings up:
1) If a dog paints a picture, that is not art unless someone trained that dog with the intent that it paint stuff, in which case the fact that the dog can paint is itself a work of art.
2) A sunset is not art. A picture of a sunset taken with artistic intent, is art.
3) A blank canvas presented with artistic intent is art.
4) A beautiful scribbling done without artistic intent is not art, until it is presented as such.
5) A man shooting himself in the shoulder with a shotgun can be performance art, if it is intended as such. (This actually happened.)
Just because something is beautiful does not mean it is art. Just because something is ugly or stupid doesn't mean it's not art. There's an important distinction between valid art and meaningful art. Just because something is art doesn't mean it's worth a damn.
And yes, grafitti is most definitely art.