Vector graphics are something you may encounter at some point if you ever do any logo design or print work. Vector images uses mathematical equations to render thus can be resized without the pixelation concerns of non-vector images. Unless you have Adobe Illustrator you might find it difficult to create a vector image. Of course you could check out Aviary when it launches all its products. In the meantime, I found Vector Magic.
Vector Magic offers a toolset for creating vector images with ease. Upon signing up you get a few free tokens to vectorize images to your hearts delight but after the first couple tokens it turns into pay service. Vector Magic walks you through a number of wizard-like steps that make turning an image into a vector just like "magic." It also offers manual controls to override the "magic" and tweak the image yourself. Once you are satisfied you can download a vectorized image.