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Which graphic format should the icons be crafted in?

A bitmap image file (such as GIF, PNG, TIFF, etc.) contains only pixel-by-pixel graphic information. Pixels (abbreviation for "picture element") are those tiny little dots of color that your computer screen is made up of. An icon sized 24x24 pixels representing a red square is actually composed of 576 individual pixels, each described by small bits of numeric data in a graphic file. A bigger image requires even more pixels, causing more binary information, and thus a greater file size.
A vector image file (such as EPS, SVG, etc.) contains geometric information. A vector image containing a red square scaled to 24x24 pixels only contains binary information describing the geometrical position of the fout corners of the square, information about the color of the square, and information defining the size of the square as 24x24 pixels on screen. Basically our red square in vector format only requires about six tiny bits of data as opposed to our 576 bits of data required for our red square created in bitmap.
The explanation is actually a bit more complex than this, but you understand the basics: Modifying the size of a vector graphic file from 24x24 to 48x48 only takes the alteration of one bit of data (the dimensions). The math does the rest. However, modifying the dimensions of a bitmap image file from 24x24 takes the extra 1728 pixels, resulting in a larger file size.
That means one single vector file can represent it's content at numerous sizes, whereas a bitmap file may only clearly represent its only pre-defined pixel dimensions.
So if a vector file format can change size to represent any dimensions it so desires, why do the icon desigers use bitmap format for their creations?
If you look at the same icon, created in both bitmap and vector formats, you will notice that the bitmap one is clean and crisp, with even the thinnest lines sharply defined. On the other hand all the images that had been resized from the vector file look blurry.
This happens because, even though vector files can be scaled to every size, there is a weakness in them This flaw is more apparent at toolbar sizes. Especially sizes under 48x48 pixels. The flaw is that computer monitors still consist of pixels, which means they ae bitmap-based.
When you take a vector image, originally sized at 24x24 and scale it down to 16x16, the relative proportions change. There's no way you can evenly arrange 24 pixels of data into 16 pixels of space because, there's no such thing as half a pixel. So the image blurs.
There's also no chance you can evenly scale 24 pixels of information upwards into 32 pixels area. Again, the image blurs.
Even more, if you take that same vector file, originally sized at 24x24 and scale it up to 48x48, you're now doubling the proportions. Now you don't have sharp 1-pixel details. You have chunky 2-pixel lines. Size it up larger (to 96x96, for instance) and those lines end up even thicker.
There are a few caveats: First, if you're working with larger icon sizes (say, bigger then 48x48) you're not going to notice the difference as dramatically, and you may consider the results to be fine. Second, your mileage will change as you design different styles of artwork. The less-detailed your image is, the less you will need to worry about this.

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