Checkout our previous post Graphic design 101 in case you haven`t.
So, what is a pixel and what is a vector? Pixels and Vectors are two ways in which images are created in computer. Pixels are tiny squares which when put together form an image. Each pixel has its own color. You might have heard of something like “640px by 480px” . All that means is that particular image is made up of a grid containing 640 boxes in a row and 480 boxes in a column. Hence, greater the number of pixels, clearer the picture. If you zoom into a pixel image, you can see the tiny square boxes. Adobe Photoshop is a pixel based software.
Vector images on the other hand are made up of lines and curves. Adobe Illustrator is a vector based software. Every thing in a vector is mathematically defined by lines and curves. Therefore, no matter how much ever you zoom in, you will not lose out on quality. A line remains a line. A curve remains a curve, i.e. they are not made up of pixels.
How does they matter? Suppose you are designing a huge banner say 24ft by 20ft. If you are doing that in a pixel based software like Photoshop, it would consume lot of space and eats away your computer RAM. Most often, your computer crashes as it cannot handle such large canvas sizes. If you are using a vector based software, you can do the same design in a very small size but in the same proportion like say 6ft by 5ft. Since it is a vector, you wont lose out on quality even after printing it on a larger size whereas if you design in a small size canvas in a pixel based software and print in on a large banner, the quality will be pretty bad.
On the other hand, if you are trying to modify an actual photograph, you must use a pixel based software such as Adobe Photoshop because all photos are made up of pixels. You can select certain parts of the picture easily using various tools available in Photoshop. For example, the magic wand tool of Photoshop detects which all pixels are in a similar color range and makes it into a selection.