Art?? Update

My friends and I have been discussing what art is ever since I came back from the Art Institute last weekend. Most people agree with my decisions on what was "art", what was "maybe art" and what was "NOT art". One person tried to convince me that what I saw as "not art" I simply didn't have the depth to perceive correctly. Meanwhile my best friend gave me her definition of art
A) it must be aesthetically pleasing to SOMEONE
B) it must make you think about SOMETHING or challenge you in some way
and
C) it requires some level of talent, i.e. she should not be able to produce it.
Therefore, the "Untitled" portrait which became the center of several art discussions over the last week was deemed "not art" before I even finished my explanation. Honestly, I love my best friend and I respect her opinion. Often I am swayed to agree with her fairly easily because I think she is smarter than I in most ways. However, in this case I was not swayed. I am still not sure it is "art" but neither am I sure it is "not art".
Tell me internet, how do you define "art". Not having seen the piece in question, do you think it can be potentially labeled "art"? What about the other pieces I mentioned?