Are you referring to Ars Gratis Artis - MGM's "logo"? - this is meant to mean Art FOr Arts Sake - in fact in doesn't the correct Latin is "art artis gratis" but this didn't look as nice so they changed it around.
Good grief! What happened there? The bulk of my answer just disappeared into the ether. Ah well, I can't be bothered writing it all out again, so - as my truncated response above indicates - I'll just say I agreed with Woofgang. What the hey!
I mean "state of the art". I realise that it means "newest", but what's with the phrase? State doesn't mean new. And if "the art" can refer to a mobile phone, then I'm even more confused. Or can the phrase mean "Newest thing to drive with in a dangerous way"?
Genuinely, the phrase doesn't make sense to me. Regardless of what it's meant to mean.
A literal translation of the phrase is "at the most advanced stage of development."
The way I see it is that 'state' should be seen as the current state or stage of a particular thing. So that particular 'art' or 'item' is at the highest stage or state so far.