Almost all computer graphics files fall into one of two categories. There are raster images which are composed of pixels in a grid, and there are vector images that are created using paths.
Vector files are math-based art files and are sometimes referred to as line art. This line art uses points and the paths between them to create an image. Vector art is most often created with computer illustration programs or with computer aided drafting programs.
Because these files are composed of math-based lines and shapes, they are easily scaled up or down without any loss of quality.
Vector images can be scaled up or down without any loss of quality.
Raster art files are created using small squares of color called pixels. These pixels are placed in a specific grid pattern to create an image.
These files are usually created by scanners, digital cameras, and image editing software programs. This type of file is best for more illustrative or photographic images.
If the design is scaled up, the pixels in the image are also enlarged. This can result in a loss of quality and a blocky appearance to your image. Because of this, the resolution of the image directly correlates to the quality of the print. 300 dpi or dots per inch will usually result in a good quality image. 72 dpi, while standard for images on the internet, will usually produce less than desirable results when printed.