Well, I'm not really interested in arguing about it, but that's wrong. If you create a graphic using the technique I used in this tutorial it -IS- a vector. It is possible to blow it up without loss of quality. There's plenty of explanations on this, also here at deviantart.
You can try for yourself if you got Photoshop. Create a new file, let's say 300pxX300px, draw an ellipse (or something) using the shape tool (make sure you have the "Shape layer" selected in the top of the browser, not the "Paths"). Then change the image size to 600pxX600px or even higher. You see? No quality loss!
You can say an easy definition of a vector is that it's possible to blow up without loss of quality. A raster can't.
If you work in Photoshop you're most of the time creating rasters, and if you work in Illustrator you're most of the time creating vectors (but not necessary all the time).
If you still don't believe me you can check out this video:[link]