Inkscape is a vector graphics editor. It’s native format is SVG, a standard for vector graphics by the W3C slowly gaining support by the web browsers. Inkscape is based on Sodipodi, which hasn’t seen any updates for nearly two years.
It’s really fun to work with Inkscape. The transformation tool and the boolean operators that allow the combination of two shapes are quite cool. I also like the layers support that allows you to create layers containing the shapes. It’s sometimes useful to be able to hide a layer when you want to concentrate on a specific aspect of the image. Inkscape doesn’t have SVG-animation support and will probably never get it, though animation support would make it really perfect.