Raster or Vector?

What is the difference between raster and vector, and why should you care? In actuality, there is a big difference, and it helps to know what it is.
As I stated in the previous blog post, software like Photoshop is raster-based and software similar to Illustrator is vector-based. Raster-based images are usually saved with a .jpg, .gif, .tiff, .png, .bmp, etc. and vector-based files are generally .ai, .svg, .wmf, etc.  That's all fine and dandy, but I still don't know what it means.
Take a look a the following image. The right side is a closeup of a raster file. Notice how it is all pixellated and made up of tiny squares called pixels. When a raster image is zoomed in too far, it will begin to lose detail.
Now look at the left side, it is a closeup of a vector image. The lines created by vectors are based on mathematical formulas and not pixels. This allows a vector image to be zoomed in and out infinitely without losing detail.
Due to the nature of each type of file, each is naturally suited to particular tasks. Photos are going to be raster files. They can not be zoomed into too far. Contrary to what you see on T.V. and in movies, you can not zoom into an image and "clean it up" to show details that are simply not there. Raster files are most commonly associated with things like corporate logos. They are usually solid colors and used to print on promotional materials, embroider on fabrics, etc.
In a recent winter Olympics, there were images placed on the sides of buildings depicting different sports. A raster file just would not cut it for something this size. A person walking by would only see a series of colored squares. If it were done in vector format, no matter how close or how far away it were viewed, it would still retain its detail.