Vector images use mathematically defined points and paths to represent shapes and lines, allowing them to be scaled to any size without loss of quality. Raster images represent shapes and colors using a grid of pixels, so increasing size causes pixels to become visible. Common vector formats are AI, EPS, and SVG, while common raster formats are JPEG, PNG, and GIF. Vector programs like Illustrator are best for solid colors and text, while raster programs like Photoshop are needed for photos with complex effects. Raster images can be traced in vector programs to convert them.