Vector and Raster refer to the two ways an image can be produced on the screen. Raster images formed by displaying pixels, or picture elements, so that the image is made from thousands of dots. Vector images are made from mathematical formulas which describe curves and lines that make up the image called paths.
The earliest graphics and CAD systems used vestor graphics. Vector images are most effective when the image relatively simple. They also enlarge well and as a result are commonly used for things like company logos and typographic fonts.
Raster images provide for high quality colour and realism, but they do not enlarge well as the pixels enlarge with the image and the image degrades or pixelates.
Adobe illustator is an example of a vector graphics editor, while Photoshop and the various paint packages are raster image editors.
It is advised that one should never use Raster graphics on their company logos.
The effect of enlarging vector and raster images
Some may ask, "Why not just never use Raster graphics?" The reason for this is that Raster graphics have the advantage of being able to edit each pixel to what you prefer,