"Feline Aids" is caused by a virus; specifically, the Feline Immunodeficiency Virus (FIV). FIV causes symptoms in cats that are very similar to the symptoms that HIV causes in people. It basically destroys the cat's immune system, causing them to be much more susceptible to infections. Most of the time, the first indication a cat has FIV is that it has an infection that seems to be causing the cat to be more ill than it should. An example would be a wound that won’t heal. Another example would be an upper respiratory infection that just won’t go away.
FIV is transmitted from cat to cat through an exchange between the saliva of an infected cat and the bloodstream of a non-infected cat. Most typically, this is through a bite wound. The virus then hides in the cat for up to six years before emerging and attacking the immune system. So, there are a lot of cats who have FIV, but are not showing any symptoms. Because it is usually transmitted through bite wounds, FIV occurs most commonly in stray cats and the occasional indoor/outdoor cat.
The most full-proof way to protect the cat from contracting FIV is to keep the cat indoors. That way they are never exposed to cats who have FIV. Also, since it is transmitted through a bite, if your cat is only going into its own yard, then you don't really need to worry. However, there are vaccines available for cats who do go outside and tend to wander.
Feline Leukemia Virus (FeLV) causes symptoms similar to FIV and is transmitted much more easily. It can be transmitted from an infected cat's saliva to a non-infected cat through the mucus membranes (lining in the mouth, nose, and eyes). Therefore, it can be transmitted by one cat simply hissing and spitting on another or through sharing a water dish, etc. Therefore, if your cat is going to go outside, then I highly recommend that you have them vaccinated against FeLV.
A simple blood test is used to diagnose FIV and FeLV. If you are going to bring a new cat into your home, I highly recommend you have her tested first. That way you will know what you are dealing with. Like I said, the cat can have the virus for years and not show any symptoms, so if they test positive, then you have to measure their expected life span and the risk to your other cats.
Unfortunately, there is no treatment for either virus. However, many FeLV or FIV positive cats live long, happy lives. If you have a cat that is positive for either virus, then it is imperative they remain indoor cats to prevent them from exposing other cats to infection.