Illustrator is a vector-based imaging program. Unlike PhotoShop, which deals in pixels (raster images), this one deals in lines and algorithms for various shapes. It functions by generating curved paths connected by modifiable anchor points. These anchors, with their handles, are ultimately editable and never "leave" the structure of the file.
What are vector graphics?
Computer graphics fall into two main categories -- vector graphics and bitmap images. Understanding the difference between the two helps you create, edit, and import artwork.
In Illustrator, the type of graphic image can have important effects on your workflow. For example, some file formats only support bitmap images and others only vector graphics. Graphic image types are particularly important when importing or exporting graphic images to and from Illustrator. For example, linked bitmap images cannot be edited in Illustrator. Graphic formats also affect how commands and filters can be applied to images; some filters in Illustrator will only work with bitmap images.
Adobe Illustrator creates vector graphics made of lines and curves defined by mathematical objects called vectors. Vectors describe graphics according to their geometric characteristics. For example, a bicycle tire in a vector graphic is made up of a mathematical definition of a circle drawn with a certain radius, set at a specific location, and filled with a specific color. You can move, resize, or change the color of the tire without losing the quality of the graphic.
A vector graphic is resolution-independent -- that is, it can be scaled to any size and printed on any output device at any resolution without losing its detail or clarity. As a result, vector graphics are the best choice for type (especially small type) and bold graphics that must retain crisp lines when scaled to various sizes -- for example, logos.