CS2 has "Live Trace", which seems to work fairly well I am told;
Any version before has <cough>Autotrace</cough>, quite possibly the most laughable tool in any graphics software I've ever used. It's tucked away under the Blend tool.
If you are desparate there is a freeware plugin for Illustrator 10 that can vectorize a raster image, it's a bit clumsy, but I have used it, But I did need to cleanup afterwards. It's called Silhouette and you can get it here:
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