Vector files

Are object based - the image is composed of a series of objects - rectangles, circles, freeform shapes etc...

The biggest advantage of vector files over raster files is that they are not dependent on resolution - designs made in vector format can be scaled almost indefinitely - only being limited by the output device.

Reef Swan has output huge stickers 3m square using vector files.

These files are very efficient in size and can be edited freely, offering great flexibility.

Raster files can be be exported from vector files.

For instance, a vector design can be created in Coreldraw and then exported as a raster file for Photoshop (.psd) or directly for the web (.jpg, .gif etc...)

The programs Coredraw, Illustrator and Inkscape are examples of vector design tools.

Raster files

Are pixel based - the image is represented by a grid of pixels.

The resolution of the image is critical to the design’s visual fidelity.

Raster files are relatively large compared to vector files.

The biggest advantage of raster files is that you can achieve a more painterly look to the design but the compromise is that they are not as easy to edit as a design that is object based.  Designs in raster programs can be manipulated using filters to achieve results that are not generally not possible in vector files.

The programs Photoshop and Painter are examples of raster design tools.