Smart Objects, Smart Guides, Layer Enhancements in Photoshop CS2

Illustrator drawings can now be embedded in a Photoshop document as Smart Objects — without rasterizing the vector data. When you resample or transform a vector smart object such as an Illustrator drawing, the full quality of the embedded smart object is preserved. In the image above (provided by Adobe), you can see a significant loss of quality after resampling the example on the left, where the Illustrator drawing was not placed as a smart object. In the example on the right, the Illustrator file was placed as a smart object and the quality after resampling is unchanged.