I know that there is a pretty good plugin for illustrator that'll turn you pixel based image into a vector image, but I can't remember the name. I think they used it in a tutorial I read in a magazine called Computer Arts. I'll post the name of that plugin here if I can find that particular article...
**EDIT**
The plugin is called 'Silhouette'. Check out
this link if you want to know more about it. There is a 15-day trial, and after that you will have to buy if you really like it. It's nothing, just a mere $299 USD