Okie, this post is originally posted here. But I find it very useful especially when you're dealing with the "convert from raster to vector" problem in AI . It's a nice and easy way do achieve the result . So far so good, here it is.
Use Live Trace to Create Line Art in Adobe Illustrator
The Live Trace tool which was introduced into Adobe  Illustrator CS2 is great for tracing line art, or even photos. Earlier  trace tools weren't worth using if you wanted to create something with  any accuracy - but that's all changed. Adobe Streamline was a standalone  tracing product (to create vector graphic versions of rasterized  images) which was improved, integrated into CS2, and renamed Live Trace.  Here is how to use it to create accurate, clean line art in  Illustrator. Below is a public domain image which I'll use as an  example.

If  your image is going to be black and white line art, it's best to make  the edges as clearly defined as possible in Photoshop by using the 
levels tool  (and possibly threshold as well). Place the image to be traced in  Illustrator by selecting File/Place... Once it's placed, select the  image and go to Object/Live Trace/Tracing Options... This will open the  Live Trace dialogue box.

Click the Preview checkbox on the right. Select Black and White under Mode (or Grayscale if you'd like to include 
anti-aliasing).  Adjust the settings until you're happy with the results. With Preview  selected, this can be quite a time-consuming process depending on the  speed of the computer you're using, but I've found it's the only way to  get good results. For this image I used the settings as shown below.

When  you're happy with the look of the line art, select Object/Live  Trace/Expand. This will delete the original image from the layer and  replace it with the new vectorized line art illustration. If you'd like  to keep the original in the document, duplicate the layer containing the  image before making the conversion.

You'll  end up with a vectorized line art facsimile of the original. The  accuracy of the line art depends on the resolution of the original and  the settings you selected in the Tracing Options dialogue box. It's a  trade off really - the more accurate the result, the more anchor points  on the vector graphic, and the slower the machine creates it - but it  still does a better job than Adobe Streamline ever did.

And here's the result. A clean, vectorized, infinitely scaleable piece of line art.