Vector Vs Raster Images
A raster image is made up of individual dots. Essentially a raster image is a set of instructions on where to place each dot, and what color it should be, like putting together a mosaic. A vector image, in contrast, is a set of instructions for drawing lines, curves, and how to color each object.
Imagine your canvas as having coordinates across the top and sides.
A raster image will have instructions that essentially says "fill in 1,1 with black, fill in 1,2 with red, fill in 2,2 with black" while the vector image will essentially say :"draw a black line between 1,1 and 5,6" draw a red circle with a diameter of 3 and a center point at 4,3" You can get a good sense of the difference between drawing a new line (which is what a vector graphic does) or expanding an existing line (which is what a raster image might do) by drawing on a balloon. Start with a deflated balloon. Just draw a straight line on the balloon with a felt tip pen. Then blow up the balloon. Now draw another line on the balloon. The newly drawn line will be better looking than the expanded one. That is because the dots of ink on the deflated balloon are spread further apart when it expands.
The vector graphic is made of overlapping geometric shapes, while the raster image is made of dots of color.
This makes vector graphics really good at creating very clean and distinct lines. It also makes it not so good at blurs, gradients and especially photographic type images. This Akasha Inkscape Tutorial does a good job of showing the practical differences. Also see the Wikipedia article on vector images.
The demonstration image below is linked to a photoshop psd file if you want to play with it on your own.
If you are buying art, best bet is to buy in vector format.
Most clip art suitable for CafePress products will be in vector format. If it is not in vector format it will most likely be too small. That is because most clip art is designed to be viewed or printed at less than 4 inches in width or height. If the image is in raster format (bitmap, like jpg, jpeg, gif, png or bmp) it will lose quality for all the reasons discussed on the image sizing page. If you buy and edit the image in vector format then you can resize it as needed without loss of quality.