There is a fundamental division in graphics between vectors and pixels. This post will brief description of vector images is given here so that you are aware of the difference between the two.
FIGURE 1 An image made up of pixels
Photographs are made of pixels, as described in the section Image Pixels earlier. The advantage is that a great amount of detail can be captured, depending on how many pixels were used. The disadvantage is that this usually means having to store many millions of pixels, and thus can result in very large file sizes.
FIGURE 2 The basis of a vector image is that it is made up of mathematically drawn outlines
Vector images are not made of pixels but of outlines whose shapes are described mathematically.
NOTE: Although Photoshop can do a little bit of work with vectors, you would normally use a vector based program, such as Illustrator, to create these images.
FIGURE 3 The vector outlines form shapes that can be filled with colour
Each of these shapes are independent of each other and can be filled with blocks of colour, gradients or patterned textures. The shapes are in layers so that those on top will cover those below, unless a layer has had some transparency applied to it.
FIGURE 4 The completed vetor image
The result is an image that looks recognisably like the original photograph, but it has a graphical or cartoon quality about it. This makes vectors very useful for diagrams, maps and company logos, but not useful for photographs as the outline shapes are not small enough to describe the very fine detail and colour variation required.
The great advantage with vectors is that they can be increased in size without pixelation problems, as no pixels are involved. They also, usually, have very small file sizes as describing an image in mathematical shapes requires a lot less information than describing an image point by point in a seemingly endless stream of pixels.
NOTE: The vector illustrations here are shown in pixel format as this website does not accept vector files.
FIGURE 5 Fonts were originally made of pixels (left), but modern fonts are now made of vectors (right)
You may think that you do not use vectors, but in fact you use them on a daily basis as the fonts you use to write with on the computer are made of vectors. Take any Word or PDF document and zoom in so that the text is as large as you can make it, and you will see that the letters are always smooth with no pixelated outlines. This is because each character in the typeface is made of vector outline shapes.
NOTE: If you do see pixelated text in a document, such as a PDF, then the likely hood is that the pages were scanned and so are built with pixels. PDFs and Word documents can hold both pixel and vector information.
Source of Information : http://shutha.org/node/751