Have you ever looked at www.svg.org?
svg stands for 'scalable vector graphics', it is a xml-based standard for saving vector graphics. Both jpg and png are formats bitmap grahics. The main difference is that bitmap graphics file consist of the picture itself, basically a color code for every pixels (OK, they are compressed and iclude different extra information). These are ideal formats for e.g. photographs.
Vector graphics is stored not as a picture but as a rule: draw a line, a circle, fill with a color etc. It is well suited for graph-like pictures (figures, logos, icons...). The main advantage is that they are scalable -- they can zoomed arbitrarily much. Bitmap images lose the precision, you can see it playing around with gimp and sodipodi.