In the begining there was raster graphics

In the begining ( of web graphics that is ) there were only raster image formats that could be used in web design.
Up to today jpeg, gif and lately png have ruled the roost but raster formats have their disadvantages including large size and the inability to scale.

That is where SVG steps in to fill a void. SVG is just about everything that all the other formats aren't. It's scalable and has the ability to embed the other formats within itself effectively making it a drop in replacement for all the other raster formats.
Why then isn't SVG the dominant web graphics format out there?
My guess, inertia. Inertia on the part of browser manufacturers and inertia on the part of web designers to include SVG in their designs.
All of the major browsers support SVG graphics excepting Microsofts I.E.
I.E has it's own vector format, VML, and it's development has been stagnated ever since I.E 6 making it less than usefull on the web.

And then of course there is the huge 800 pound gorilla in the room, yes on the web this gorilla is even bigger than microsoft! This gorilla is adobe's flash vector graphic ecosystem.
Flash in itself is not a vector graphics format but rather more of a collection of software and concepts that allow the use of vector based graphics in animation and video. Flash comes as a browser plug in for the average web surfer but despite having to be installed as a plug in, has risen to decome the #1 mode of viewing vector graphics on the web.