Traditional image formats all have their own separate drawbacks. Some will pixelate, others can't handle transparency, and some even mess your colors up. If you have an image that you're happy with and want to make a scalable version of it that won't pixelate when zoomed in, then Vector Magic is the tool for you.
Vector images use geometric shapes like circles and squares to display an image, as opposed to traditional image formats that use pixels. The end result is a precise representation of your image that won't have any trouble being magnified. Depending on the result you're looking for, vector imaging can greatly increase the quality of an image used on a web page. Generally, vector imaging works best with scans of logos and logo artwork, although there is some practical use for it with photographs, as well.
Working this web application is a snap. Just upload your picture, and Vector Magic will convert it into a vector image file for you. You can preview the results as compared to the original, and then download the newly converted file. You can also change the level of detail and change the color options if you're working with a piece of artwork rather than a photograph or scan.
In my short test run of Vector Magic, I found it to be quite good at what it says it does. All of my conversions came out great, and I couldn't find any feature on the site that isn't self-explanatory and fully functional. Vector Magic limits how many images you can convert and download, but a premium account is available. The site also seems equipped to deal with graphic arts and logos the best. Try it out for yourself, and show us your new vector image in the comments.