Word processors and spreadsheet or presentation applications, although suitable for creating files for office or Internet use, are not recommended for creating digital art for print. Microsoft Office applications are included in this group. In some cases, however, such files may be converted so as to enable use.

Here are 2 examples of an image when magnified or scaled up. You will notice the difference in clarity. The mascot design below was designed by Logo Design Works for a client.

Vector Graphics typically are generated using drawing or illustration programs (e.g., Adobe Illustrator) and are composed of mathematically-defined geometric shapes—lines, objects and fills. Since vectors entail both magnitude and direction, vector elements thus are comprised of line segments whose length represents magnitude and whose orientation in space represents direction.

Vector graphics usually are easily modified within the creating application and generally are not affected detrimentally by scaling (enlarging or reducing their size). Because vector elements are mathematically-defined, scaling simply requires modification of their mathematical locations. However, vector files do not support photographic imagery well and often can be problematic for cross-platform exchange. Vector graphics typically are saved as EPS format.

This makes vector graphics ideal for logo design. Creating a vector logo is more difficult but the effort pays for itself when the vector logo file is sent to printers or sign makers etc. The vector logo can be scaled up or down with out losing quality and would enable smooth transition between various media.

Raster Graphic Images are produced by digital image capture devices: digital scanners or digital cameras, or by pixel editing programs (e.g., Adobe Photoshop). Raster images are composed of a matrix (grid) or bitmap of digital picture elements (pixels). Pixels are squares or rectangles described as black, white, gray or color. Raster images typically are saved as TIFF format, but can be saved as EPS as well.

Whereas conversion from vector to raster is easily accomplished, raster conversion to vector is much more difficult (and often is not possible). Raster images typically are easily shared across various platforms, but can be more difficult than vector graphics to modify. As well, raster graphics are impacted by scaling.

Creating a raster logo design using Adobe Photoshop might be ideal for web only usage but if you are serious about branding, then the resulting raster PSD logo file will be of limited use. When sent to a printer or sign maker and when they try to scale the raster logo, the quality deteriorates and pixellation occurs. Yes, agreed, creating the raster logo design in Photoshop would enable a designer to pile on stunning effects (such as drop shadows, beveling, blurring etc). But the final deliverable will have limited uses.

Read more about different image file formats. Here is an indepth explanation of vector graphics.

Vector and Raster File Extensions

Extension	File Application	Vector	Raster
.86v	TI-86 vector file
.ai	Adobe Illustrator graphics
.ait	Adobe Illustrator template
.art	Adobe Illustrator graphics
.cdl	SignLab vector graphic file
.cdr	CorelDRAW vector image
.cdrw	Corel Draw file
.cdt	CorelDRAW Template
.cgm	Computer graphics metafile
.cht	Harvard Graphics vector file
.cit	SeeYou vector maps
.csh	Adobe Photoshop shape
.csl	Corel symbol library
.ctn	Cadterns Sloper File
.ddoc	Apple MacDraw vector graphic file
.dlg	Digital Line Graph vector image
.do	Digital Line Graph optional vector data
.drw	Vector file
.dvg	GraphicsWorks vector drawing
.dxb	AutoCAD drawing exchange format
.emb	Orchida Embroidery System embroidery pattern
.fh	image file
.fh10	Adobe FreeHand 10 drawing file
.gcd	Generic CADD Drawing format (vector)
.gem	Ventura Publisher GEM vector picture
.gl2	HP Graphics Language plotter file
.hpg	Vector image (HP Graphics Language plotter file)
.hpgl	Hewlett Packard Graphics Language plot file
.ima	EGO – Chart – Autumn Mirage vector graphics
.md	Mayura Draw vector drawing file
.mvg	ImageMagick proprietary vector graphics format
.odg	OpenOffice Draw graphic file
.pat	Corel vector pattern
.pat	Pattern Maker Cross-Stitch Pattern File
.pat	Polygon Attribute Table File
.pat	Corel Paint Shop Pro Pattern Image File
.pat	PCStitch Pattern File
.pat	Smash Simulator Test Pattern File
.pat	Cadterns Sloper File
.pat	Orchida Embroidery System File
.pct	Apple Macintosh QuickDraw/PICT bitmap graphics format
.pif	Vector image GDF format
.pix	Image Systems vector
.pix	Inset Systems raster & vector format
.plo	HP Graphics Language plotter file
.plot	Vector graphics
.plt	Autodesk AutoCAD HPGL vector graphic plotter file
.ps	Adobe PostScript file
.sdw	Amidraw vector image
.sdw	WordPro drawing
.slddwg	SolidWorks drawing 2D vector graphics file
.sp	SignPlot output format
.spa	FutureSplash Movie (Adobe Flash)
.svf	Simple Vector Format
.svg	XML based vector graphics format
.sxd	StarOffice draw file
.tdr	Top Draw vector graphic file
.vec	Daylon Vectre vector graphic
.wmf	Windows metafile
.xar	Corel Xara drawing
.xar	Xara X vector drawing
.psd	Adobe Photoshop
.jpg	JPEG Raster File Format
.gif	GIF Transparent File
.PNG	Portable Network Graphic Transparent File Format