Does using AC in car reduce mileage?

A valid question in the context of high fuel prices.  We shall evaluate this in two different scenarios.  While driving slow, say in cities, driving without AC by keeping window glasses down gives better mileage.  However, keeping window glasses down and driving in high speeds (speeds above 65kmph) without AC, there is no improvement in mileage.  Rather there is a drop in mileage compared to driving with AC keeping window glasses up.  This aspect is proven through studies conducted by certain organizations.

The mileage drop while keeping the window glasses down is substantially higher in new generation vehicles, which are designed aerodynamically, compared to old vehicles.  The drop in mileage in this case is attributed to the resistance developed by the air that gets into the car.