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In the early days of desktop publishing (1985-1990) I was fascinated with Adobe Illustrator and some AutoCad utilities that could convert bitmap work and particular technical photographs into quality line drawings.

Vectorization — known by many in the publishing, GIS and graphic design industries — allows a bitmap image, generally from a scanner or other equipment for acquiring digital input, to get converted into a more manageable, flexible, light and editable vector format.
Bitmap images are made of a series of dots or pixels.
Vector images are made of mathematical formulas.
Bitpap images are usually:
a) large in size
b) very hard to edit
c) difficult and slow to manage
d) jagged looking
Conversely, vector images are typically:
a) small in size
b) editable
c) resizable without losing quality
d) easy and fast to manage
Therefore, as you can clearly see, there are several advantages in having high quality vector illustrations and maps for all needed references for certain applications like technical documentation. This guarantees great savings and the ability to easily edit, update and change many visual references that are part of critical technical documents. About.com Understanding Bitmaps and Vectors provides resources on the topic.
In 1989, I had to create technical illustrations for airplane operating manuals with professionally drawn outline parts and sections of the aircraft that had parts that may have needed changes or maintenance. The technique involved shooting the best quality black and white photograph of the actual aircraft and its different parts. During the shoot, we made sure we had a strong sharp contrast in our images and we used selected film for this purpose. Once the photographs were developed and printed (we had no digital cameras at that time), we scanned the images into a computer, and then manipulated the contrast and brightness of the image that gave us the "essence" of what was actually there.
At this point we would start auto-tracing, initially with Adobe Illustrator's limited functionality and later with more automatic and sophisticated tools like Adobe Streamline that's no longer produced and has been replaced with Live Trace [pdf file]
Once done, a capable technical illustrator would clean-up and refine the newly created Illustrator vector files until they were perfect.
As I became more familiar with the technique and the available tools, I realized how much potential was available for businesses living on paper-based visual references that had no digital counterpart, costing them a lot of money for updating and changing the contained information.
Later, I successfully experimented converting airplane landing maps, which, in 1989, were still largely paper-based and uneditable on any digital computerized system.
Bitmap to vector conversion is a difficult, highly technical and time-consuming task. There is no program or utility which can vectorize the image you have into a perfect one because the software doesn't know what you need.
This is why bitmap to vector conversion work requires dedicated time, patience and several trial and error sessions to fine tune the best procedure and workflow to adopt for your assignment.
Here is a regularly updated and comprehensive resource list that you can use to support and speed up your conversion of bitmap artwork into quality vector drawings:
Note: Most software products listed here have trial versions available. Check the company's Web site for information.
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42) ShySurfer
http://www.shysurfer.com/
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41) Inkscape
Inkscape is an open source vector graphics editor that is compatible with Windows, Linux and Mac OS X. Inkscape imports and works with many common graphics formats including JPEG, PNG and TIFF. Inkscape can export images as PNG and other vector-based graphics formats. If you use Inkscape with GIMP, the open source graphics editor, you can get the same capabilities found in their high-priced counterparts.
Inkscape uses the W3C standard Scalable Vector Graphics (SVG) file format. Supported SVG features include shapes, paths, text, markers, clones, alpha blending, transforms, gradients, patterns and grouping. Inkscape also supports Creative Commons meta-data, node editing, layers, complex path operations, bitmap tracing, text-on-path, flowed text, direct XML editing and more. Price: Free.
http://www.inkscape.org/
I hope this is a useful and lasting reference for anyone needing to do effective bitmap to vector tracing. More applications are coming. In the meantime, if you know of others, please leave a comment.
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40) Boris Red 4
Boris Red integrates 2D and 3D compositing, sophisticated titling, paint, rotoscoping, a suite of tools to create and extrude vector objects, 3D creation and animation. The Vector Trace tool enables the conversion from a raster bitmap image such as a tiff, jpeg or a frame from a movie file to a scalable vector graphic with the ability to extrude any of the resulting vector shapes. Images are converted into vector by selecting the Vector Trace tool and then dragging the tool over the image to be converted. Options for this function include the ability to select the color or alpha channel with which to base the conversion. Red works with Win XP and Mac OS X. Price: USD $295 for upgrades; $795 for Boris users; and $995 for the full version.
http://www.borisfx.com/products/red4/