A/C and fuel efficency?

That's not necessarily true - it depends on what speed you're going.  If you're going at a relatively slow speed, there is minimal drag created by lowering your windows, and you'll have better fuel efficiency than with the A/C on.

Once you get up around highway speeds, the drag from lowering your windows increases, and you're better off having the A/C on.

It's better to run the A/C with the recirculation on.  It takes less energy to recirculate already cooled air than it does to cool more outside air.

 Thanks Dana!  I've always wondered...So city driving  = windows, and freeway driving = a/c.  nice rule of thumb

Yeah, generally speaking that's a good rule.  It's a little tricky because every car has a break-even point speed where A/C becomes more efficient than open windows, but it's different for every car.  I believe generally the less aerodynamic a car is, the less difference the drag from air coming through the open window will make.  So for example a boxy SUV will be better off with the windows open at a higher speed than a Prius.

But since nobody has quantified this break-even speed for the various different car models, you're pretty safe to use the highway speed rule of thumb.