Vector. Don't panic.

Here is another of my short reassuring notes for those iWork users, who don't have specialised technical knowledge (which they may not need, anyway).

If you go on an internet forum for help, get bombarded by stern technical questions from the regulars waiting for fresh meat, you can get confused instead of enlightened. Don't.

When you hear about vector graphics that are not mentioned in iWork manuals or help articles, don't panic or despair. PDFs, that iWork is perfectly capable of producing, is as good a vector image as any other. So, ignore vector and concentrate on PDF. The point about vector graphics is that they can be resized without losing crispness. This is usually all you need to know.

Here's a short excerpt from the Wikipedia article on PDFs:

A PDF file is often a combination of vector graphics, text, and bitmap graphics. The basic types of content in a PDF are:

• text stored as content streams (i.e., not text)

• vector graphics for illustrations and designs that consist of shapes and lines

• raster graphics for photographs and other types of image

In later PDF revisions, a PDF document can also support links (inside document or web page), forms, JavaScript (initially available as plugin for Acrobat 3.0), or any other types of embedded contents that can be handled using plug-ins.
...
Two PDF files that look similar on a computer screen may be of very different sizes. For example, a high resolution raster image takes more space than a low resolution one. Typically higher resolution is needed for printing documents than for displaying them on screen. Other things that may increase the size of a file is embedding full fonts, especially for Asiatic scripts, and storing text as graphics.

Read more on Wikipedia about vector graphics here.