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Here I am explaining the difference between the pen tool settings to see whether you are working with vector or raster in Photoshop.
This tutorial is a visual supplement to the 'Did You Know..?' box on my userpage, which is quoted in full below.
There are quite a few people who are confused by the various settings and there are those who think that anything created in Photoshop has to be vexel while Illustrator is the program people use for vector. The latter is true, people do use that a lot, but Photoshop is perfectly capable of creating vector images. You will need
Photoshop 7 +
Enough pen tool knowledge to make a shape or [use the rectangle tool].Did You Know..?
"In Photoshop, just because you have used the pen tool to create something, it does not necessarily mean it is a vector - and it also does not necessarily mean it is vexel just because it was done in Photoshop and not in Illustrator.
The pen tool has two options in this respect, which are called "Shape layers" and "Paths". If you are using the shape layers setting, you are indeed making vector shapes, if you're using the paths setting, you are making raster layers, which are made out of pixels and do not have the vector qualities of scalability.
If you are unsure whether you're making vector shapes or layers, here are three simple ways to tell the difference while you're working:
1. Look at the pen tool setting - is it set to shapes, or is it set to paths? Hover over the selected icon to find out.
2. Resize your picture to about 50-100 pixels across - make it really small. Then resize it again back to its originial size. If the quality has been damaged in any way, you are not using vector shapes.
3. Start a new path. Does it automatically create a new shape layer or are you still working on the layer you previously had selected? If it is the latter, you are not working with vector shape layers.
Lastly, if you merge any layers or add any Photoshop filters, your image will no longer be a vector. You can use layer effects such as 'gradient overlay' and 'stroke' which you find in the FX menu beneath your list of layers. Why? These will scale along with the vector shapes, but filters (noise, lens flare, texture) will not.
Here endeth the lesson!"