Images used in graphics design software on computers such as Adobe Illustrator and Corel Draw are usually vector based. That is they use a set of instructions based on a position of the boundaries of the graphic element and the colour that the shape has.
Images produced by photo editing programs such as Photoshop use .jpg, .jpeg (Joint Photo Editing Group), .bmp (bitmap), .tif (Tagged Image File format) and .png (Portable Network Graphics) are a bitmap where each pixel in the image has a position and colour attributed to it.
Using bitmaps in Adobe Illustrator is not an efficient use of the program because, even if you resize the bitmap image in Illustrator, it keeps the original graphic at its original size within the file so as to allow you adjust its size in the future. This can make for massive Illustrator .ai files!
A more efficient use is to vectorise the bitmaps so that you can then manipulate the images as efficient vector files.
This is how it can be done:
It is better if you can vectorise a large bitmap and then rescale or resize the vectorised image rather than scale the bitmap and then vectorise the small image because small ‘errors’ can be introduced into the image. These ‘errors’ will scale with the vectorised image and if you then enlarge the vector image the errors will also be enlarged if the original bitmap as too small.
So, if you are working with bitmaps in Illustrator, if you can, change them to a vector image to work on them and, if you want, only rasterise them again when at the final size you need.