Vector Magic was recently introduced to me by Spreadshirt. Essentially, it's an online vector tracing tool, kinda like those bundled with packages like the Adobe suite or other design programs. It relies on Flex, although I can't quite figure out whether it's Flex or the Vector Magic servers that are doing the heavy lifting - probably a bit of both. I'm quite interested in this though, and their claims about the awesomeness of their service vs. others are certainly impressive.
Interface-wise it's functional, pretty standard flex interfaces, which actually inspires confidence that the back-end programming must be pretty hot. Sofar I've only tested this with simple and unimportant images, but it's real strength is going to be in Vectorisation of things like corporate logos - I just haven't given this a test yet. But I'd certainly say that it's worth a visit.