Two kinds of graphic formats are used in electronic mediums. Raster and Vector.
Raster graphics are stored as a bunch of pixels, while Vector graphics are stored as a bunch of shapes and nodes.
Raster graphics start losing their clarity as they are stretched beyond their original maximum size. Vector graphics can be (theoretically) stretched to any size without loss of clarity.
Vector graphics van also be used to draw precise shapes, since each stroke can be tweaked separately. But Raster graphics have a better color reproduction.
Photoshop and GIMP are examples of Raster graphics editors.
Illustrator, Inkscape, CorelDraw are some of the vector graphics editors.
Vector graphics can be exported to raster graphics.
Inkscape is a open source, free vector graphics editor I use for lettering. More on this in the workflow discussions.
Question: If vector graphics editors create so much accurate, scalable graphics, why don’t I produce the complete artwork in Inkscape?
Answer: That’s something on my agenda for future. Currently I am learning Inkscape.