Vector vs Bitmap?
In the computer world there are a lot of different ways to store an image. These different ways of storing are called file formats, or image file types. There are many different types of image files, such as: jpg, gif, png, svg. However, no matter what file type you use, every picture on a computer can be classified as either a Bitmap or Vectorimage. The difference is in how the computer reads and displays the images. It's important to know the difference between them because each format has it's own strengths and weaknesses.
Bitmaps are the most common type of picture format. Most of the pictures you see on your computer are bitmap images. Bitmaps are just that... a grid or map, of points of light called pixels (PICture ELement or Pixel) little dots of color. Bitmaps are made up of rows and columns of these pixels that come together to form a picture. The computer basically reads the image a bunch of colors arranged in order to make a picture.
The advantage to bitmaps are they are easy to create. Take a picture with a digital camera, or scan something in, and you've got one. They are easy to come by and are cost effective. You can take a picture or scan in a drawing, and easily show it on the Internet or send in an email.
The disadvantage of bitmaps, is they are not upward scalable. You can make a bitmap smaller without to much loss, but you cannot make it larger without loosing quality. If you ever see a bitmap image blown up, you'll notice it has little individual squares or dots that make up the image. When you see it at its optimal size you don't notice the individual dots, but if you try to make it bigger, the image become fuzzy, jaggy or pixelated.
Vector images are inherently different from bitmap images, because they are not made up of the of the colored dots that make up a bitmap. Instead they are made by mathematical formulas called "lines and curves", that form shapes, that in turn make up an image. So instead of the computer reading a list of colored dots arranged in an order, it sees mathematic formulas that create shapes. The most common vector image you come in contact with every day, is type. The type you are reading on the screen right now is vector based. You can scale it up and down as much as you want, and you'll never see a single pixel.
The Advantage to Vector images is it's scalability. In other words, it's ability to reproduce itself at any size. With a vector image, you never have to worry about an image looking pixelated (fuzzy or jagged looking). You could print it on a postage stamp , or on the side of a bus, and never loose any quality.
The disadvantage of vector is the time and talent needed to create it. You cannot take a photograph in vector. Vector images are drawn on the computer by a graphic artist using vector editing software such as Adobe Illustrator. As a result, vector graphics are not as cost effective as bitmap images.
When Should I use Vector vs. Bitmap
Vector images are important if you have an image that you will be using repeatedly at different sizes. For example, a company logo might might be put on envelopes and letterheads, as well as posters and billboards. Having your logo in vector makes it easy to print it at different sizes, and retain a clean, crisp image, no matter the size.
For most other basic jobs bitmaps are a faster and more cost effective way to produce images.
The matter of vector vs. bitmaps is a matter of application. Quality Vector images are an investment. It takes a skilled artist many hours to produce a quality vector logo, illustration, or diagram. But for images that are going to be used again and again, the investment is worthwhile.
Wikipedia discussion on Bitmaps and Vector images.