I found this tool on Digg a couple of days ago but I couldn’t use its service because of the “Digg Effect”. Everybody, that includes me, was trying to convert some bitmaps to vector with a tool called VectorMagic, the online tool for precision vectorization.
VectorMagic is the result of a Stanford University Artificial Intelligence Laboratory research project by James Diebel and Jacob Norda.
Vectorization (aka tracing) is the process of converting a raster image to a vector image.
Raster images are pixel-based, whereas vector images are represented by geometric shapes such as lines, circles and curve
Basically this tool converts bitmaps to vector. However, this might be the best vectorization tool out there, at least that I have used befor. They even created a link showing some comparisons between the VectorMagic, Adobe Live Trace (Illustrator CS2) and Corel PowerTRACE (CorelDRAW X3).
I have converted some images to vectors using it with very good results, specially with logos and some photos. Besides that it's really easy to use, with a distinct and clear user-interface, and the best thing is that it's online and free.
If you need a vectorization tool, VectorMagic is definitely an excellent choice.