Raster formats use a grid of pixels to represent images, making them ideal for photographs and detailed graphics. Each pixel contains color information, which means that enlarging a raster image can lead to a loss of quality, resulting in a blurry or pixelated appearance. Common raster formats include JPEG, PNG, and GIF. Vector formats, on the other hand, use mathematical equations to create shapes and lines, allowing for infinite scalability without loss of quality. This makes them perfect for logos and illustrations. Popular vector formats include SVG, AI, and EPS. Vector graphics maintain clarity at any size, making them versatile for various applications.