Tracing essentially creates the paths (and nodes) it identifies within a bitmap image and then uses those paths to create a vector-based image from the bitmap. Rendering in Inkscape is always done using Potrace, but there is an extra option called Simple Interactive Object Extraction (SIOX) that allows separation of an object from the background bitmap image.
The results of this tracing process depend heavily on the quality of the original images. Potrace works best for black-and-white line drawings or black-and-white pictures with high contrast. It can be used for screened color prints and color photography as well, but it can require a bit more careful detail and work to make it happen. Let's go through a couple of examples.
