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Raster vs. Vector Files (and DPI) You will hear talk of raster vs. vector files. An example of raster is a typical digital photograph whereas an example of vector is a typical logo (in its original format as created by the logo designer). Raster files tend to have extensions like .jpg and .gif whereas vector files tend to have extensions like .ai or .eps. Adobe Photoshop is the gold standard for working with raster files (sometimes referred to as bitmap files or pixel files) whereas Adobe Illustrator is the gold standard for working with vector graphics (sometimes referred to as postscript graphics).
Raster Unless you up-rez them, raster images have a fixed amount of resolution (for example an uncropped photo from an 8 megapixel digital camera would give you 30 inches x 20 inches when printed at 120dpi but only 15 inches x 10 inches when printed at 240dpi). DPI is the way you tell the printer how large to make the raster image on the paper (a high dpi such as 200-300 will give you a better-looking result but your raster image needs to have enough pixels; a lower dpi such as 120dpi may work well for large format printing intended to be viewed from a distance but won't work as well for printing say a brochure). Raster graphics can be traced (either by hand or using auto-tracing utilities) with varying degress of success if you need to create vector artwork based on them (for example if you need the outline of a particular kind of dog's head for a logo then you can create the vector artwork by tracing a photo and then tweaking the curves as needed in Illustrator).
Vector Vector files consist of mathematical descriptions of things like points and curves (although on the screen you don't see the math, you just see the points and curves). Vector artwork can typically be scaled up or down as needed for different purposes without significant loss of quality (unlike a raster image which can suffer if you try to make it larger). Vector artwork doesn't have anti-aliasing unless you explicitly convert the vector artwork to raster (if you need to send someone a .jpg of your logo for example). Vector artwork works great for large format printing (just scale your lines and points up and they will print nicely on a 2.5 foot x 7 foot standing vinyl banner). Vector artwork can be fairly easy to re-color (say you need to modify your logo colors so it will work against a black background). Unlike printers, web browsers usually don't know what to do with vector graphics and instead need to be fed raster graphics (.jpg or .gif, not .ai or .eps). Vector artwork can be "rasterized" for situations where a raster graphic is needed.
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A Note on Logos
A Note on DPI in Photoshop If you look at DPI in Photoshop (for raster graphics) it's called Resolution and is measured in pixels/inch (or PPI as it's commonly known). When you are creating web graphics, this Resolution setting can be largely ignored (web browsers/pages care about pixels, not DPI). But when you are creating raster graphics for print then the Resolution setting determines the final output size of the graphic on the piece of paper. So to determine the printed size of a photo, for example, you need to look at both the pixel dimensions of the photo and also at the Resolution setting. The final printed size is pixels divided by Resolution. So an image with 3,000 pixels of width and a Resolution setting of 300 pixels/inch will yield a print that is 10 inches wide (300 pixels per inch x 10 inches = 3,000 pixels). An image with 3,000 pixels of width and a Resolution setting of 120 dpi will yield a print that is 25 inches wide (120 pixels per inch x 25 inches = 3,000 pixels). If you have an image with 3,000 pixels of resolution and you need it to print at 50 inches then the resolution setting for that would be 60DPI but this might be too low to achieve good results (instead you might need to up-rez your image to give it more pixels or look for a source graphic with more pixels of resolution to start with). So you can adjust the Resolution setting in Photoshop to control the final print size of your photograph (raster graphic). But as you lower Resolution (DPI) to achieve a larger printed photo, quality may begin to suffer once you get below say 200DPI (except for large format pieces where the intended viewing distance is further back than say an 8"x10" print and so you can get away with say 120DPI). The impact of lowering the Resolution (to get a bigger printed size) on quality depends to some extent on the nature of the printing device (some printers aren't precise enough to make use of more than 200DPI whereas others will do best at 300DPI) and also the intended viewing distance for the piece (will someone be right up against a photo hanging on the wall or back a bit looking at a 2.5 foot by 7 foot tall standing vinyl banner?) So we'd suggest ignoring PPI/DPI/Resolution for web graphics (focus instead on pixels since that's how monitors are set whether it's 800x600 or 1024x768 or larger). But for print graphics the DPI/Resolution does matter and the particular setting (whether it be 300dpi or 120dpi) is often dictated by the print vendor and their particular type of printing machine. If your raster graphic doesn't have enough pixels to print at the desired size with 300dpi of resolution then you have to lower the resolution until you do have enough pixels (but if you have to lower the resolution too much then quality may begin to suffer and you may want to look for a source image with more pixels). For large format pieces it may be necessary to up-rez your photo to give it more pixels than it had to begin with (and some printers will take care of that chore for you). There is also something known as LPI which has to do with the ability of the chosen printing machine to resolve detail. Typically, however, we just follow the recommendation of the printing company in terms of how much Resolution/PPI/DPI they want in the source file (and this tends to vary from 120DPI to 300DPI).
Conclusion Meanwhile, raster artwork is largely the world of photos and web site graphics (just keep in mind that a typical web site graphic will not work very well for offset printing). For web graphics we ignore DPI and focus on pixels and for print graphics we try to use 300DPI if the image has enough pixels to support that (without up-rezzing) but for large format pieces the printers often say you can drop down as low as 120dpi in order to get your photo to print larger with acceptable quality because of the increased viewing distance.
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