vector, bitmap

Vector
Vector graphics files store the lines, shapes and colours that make up an image as mathematical formulae. A vector graphics program uses these mathematical formulae to construct the screen image, building the best quality image possible, given the screen resolution. The mathematical formulae determine where the dots that make up the image should be placed for the best results when displaying the image. Since these formulae can produce an image scalable to any size and detail, the quality of the image is limited only by the resolution of the display, and the file size of vector data generating the image stays the same. Printing the image to paper will usually give a sharper, higher resolution output than printing it to the screen but can use exactly the same vector data file.

Bitmap
A bitmap image is quite literally a collection of squares that, taken together, make up the image. The squares might be of different colors, but they are all the same size. Reduce any bitmap image to its parts and you'll see this in detail.
When a bitmap image is reduced in size, some dots must be eliminated, lowering the resolution. When enlarged, a bitmap image can appear blocky if it does not have a high enough resolution to supply the information for the image's details.