
When it comes to computer-related media, the biggest confusion I seem to see is between vector and bitmap images (JPEG, GIF, PNG, and TIFF files). Any image can be made into a bitmap, but a bitmap cannot be made into a vector image without redrawing every line to create a new file completely. Bitmap uses tiny squares each with its own color to make up an image, while vector uses mathematical points and lines connected to each other to enclose a shape. Each serve their own purpose in design work.
A bitmap image is a map of a fixed number of pixels. Usually for web, this map contains 72 pixels per inch, while for an image for print, this is usually set to 300 PPI. This is referred to an as an image's resolution.
The main benefits of bitmap images are the distribution range and realistic look--ideal for photographs.

A vector image is simply points, lines, and curves which enclose a shape--known as a path. These shapes are typically filled with solid colors, but can also contain gradients and minimal effects.
The latest buzz in vector graphics seems to be the Scalable Vector Graphics (SVG) format. This allows you to generate XML files detailing each of the image's points, lines, and colors to be rendered on-the-fly by your web browser.
Vector images are scalable without limits, easily manipulable, extremely detailed, and typically less in file size. They do not rely on a resolution.

In design work, both of these drawing techniques are used to complement each other. Typically for logo and illustration work, we draw in vector format so that it may be easily manipulated, transferred, and scaled. For photographic work, we typically work in bitmap to ensure a realistic look for the image and effects.
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