@Terrificli -- The difference between the two is pretty simple. Vector graphics are based on mathematical equations. Think of vector graphics as wire frames with textures added to the top of them. Because the graphic is based on equations, you can make it as small or as large as you like with no loss in resolution.
Raster graphics, on the other hand, are based on pixels (individual points which, together, make up an image). If you make those pixels too large, you will lose resolution as images are blown up larger than originally intended.
The big deal about vector graphics is that they are making a comeback as clean, corporate logos and such can be designed with them, stored in relatively small files and then made as large as small as desired at will.