New Way to Do Automatic Vectorization that Works a lot Better than Existing Tools.

Trace your bitmaps with Vector Magic 

Not all of you will have heard of this, but there is a process that is done in the graphic design and print industries called "vectorization." It is also sometimes called "tracing" and the prefix "auto-" is sometimes stuck in front of either word. This is the process of converting a bitmap image - described by a grid of tiny little pixels - into vector art, where the shapes are described with mathematical formulas.

The main benefits of vector art are that it can be scaled without causing pixelation or blurriness, and that it can be edited in a much more intuitive way than pixel-based images.
Anyway, this process is typically done by hand because the automatic tools for doing this just don't work well enough. In fact, a lot of designers find it is faster to just redraw an image than to clean up the garbage most auto-tracing tools produce.

But all that has changed. A couple of researchers out of the AI (that's artificial intelligence) lab at Stanford University have figured out a new way to do automatic vectorization that works a lot better than existing tools. It doesn't work on every image - some images are just too small for a computer to figure out what is going on - but it does work on enough images that it is actually useful.
In technical terms, it works best on medium- to high-resolution images that were digitally rasterized from a vector art original, and that do not contain very many shading gradients. It can handle some noise, but the quality of the result does degrade accordingly.
In basic english, don't expect miracles. If you'd have to make some educated guesses while redrawing it, chances are the computer will not make very good guesses. But if it is a clean image that is big enough to see all the little details easily, this tool should do the trick.

Anyway, they have a website where you can try it out online without downloading any software:
 
Beyond the first two conversions, which are free, they charge a subscription fee. If you don't like subscriptions, you can also just buy the desktop application, which works on both Mac and PC. The prices are reasonable for any professional who does this task even semi-regularly, as it saves hours and hours of time. And hand-tracing is not exactly fun work!