Vector and raster images in contrast to "bitmap" or "raster" images, a vector based picture consists not of single pixels, but of "objects". These objects may be modified in size, shape, color, and position - at any given time and without the loss of quality. That's what makes vector graphics so special. In other words: there is no "resolution" in vector art designs. Any image may be rendered as large as the intended application requires it. As a result, vector graphics have recently become quite popular in modern, responsive web designs.
The most common proprietary vector formats are AI (Adobe Illustrator) and CDR (CorelDRAW). Opposed to these, the W3C (World Wide Web Consortium) has created and developed a new, open standard called SVG (Scalable Vector Graphics).
A raster graphic is an image made of hundreds (or thousands or millions) of tiny squares of color information, referred to as either pixels or dots. (Technically pixels refer to color blocks viewed on an electronic monitor where as dots refer to the ink dots on a printed piece. But even professional designers, myself indluced, often use these two terms interchangeably.)
The most common type of raster graphic? A photograph. The designer’s preferred program for creating and editing raster files? You guessed it: Adobe Photoshop.
Popular raster file format extensions include: jpg/jpeg, psd, png, tiff, bmp and gif.
Encapsulated PostScript file (EPS) / Adobe Illustrator file (AI). EPS language file format can contain both vector and bitmap graphics. If the image has been created using paths in a program such as Adobe Illustrator or Macromedia Freehand, it is a resolution-independent vector image and can be scaled to any size without losing quality. Whenever possible, it is best to supply graphics as vector images. However, if the image has been created using a paint program such as Adobe Photoshop, or if it is a scanned photograph, it is a bitmap image and is resolution-dependent. In this case the image must be supplied high-resolution - at a minimum of 300 DPI (dots per square inch), actual size. This means that the original file must be at least 300 DPI from the outset. Scaling up a lower resolution file will result in a loss of quality. All bitmap images must be provided in either 'grayscale' or 'CMYK' (Cyan Magenta Yellow Keyline) colour formats.