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Which graphic format should the icons be crafted in?

A bitmap image (like GIF, PNG, TIFF, etc.) consists of pixel-by-pixel graphic information. Pixels (abbreviation for "picture element") are the tiny little dots of color that make up your computer screen. A 24x24 pixel icon picturing a plain red square is actually composed of 576 individual pixels, each described by little bits of binary data in an image file. A bigger image requires even more pixels, leading to more binary information, and thus a greater file size.
A vector graphic file (like EPS, SVG, etc.) contains geometric information. A vector image containing a red square scaled to 24x24 pixels would simply contain binary information describing the mathematical location of the square's four corners, information about the color of the square, and information defining the size of the square to be 24x24 pixels on screen. That means our red square vector file only requires about six little bits of data as opposed to our 576 bits of data required for our red square created in bitmap.
In reality, the explanation is a bit more complex than it's described, but you see the basics: Modifying the size of a vector image file from 24x24 to 48x48 only takes the editing of one bit of information (the size). The math does the rest. But modifying the dimensions of a bitmap image file from 24x24 takes the extra 1728 pixels, resulting in a larger file size.
Thus one vector file can represent it's content at multiple sizes, whereas a bitmap image may only accurately represent its single pre-determined pixel size.
So if a vector file can change size to represent any size 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. While all the images that had been resized from the vector file look blurry.
This happens because, although vector images can be resized, there is a flaw in them This weakness becomes more apparent at small sizes. Especially resolutions of less then 48x48 pixels. The flaw is that computer monitors still consist of pixels, which means they ae bitmap-based.
When you take a vector file, initially sized at 24x24 and shrink it down to 16x16, the relative proportions do not match. There's no way you can evenly distribute 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 resize 24 pixels of data upwards into 32 pixels area. The image blures once again.
Furthermore, if you take that same vector image, initially 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 messy 2-pixel lines. Scale it up larger (to 96x96, for instance) and the lines will become even thicker.
There are a few caveats: First, if you're creating larger icon sizes (say, above 48x48) you're not going to notice the difference as dramatically, and you may find the results acceptable. Second, your mileage will differ as you design various types of icons. The less-detailed your linework is, the less you will need to worry about this.

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