Images in raster file formats can be linked to an Illustrator file. (Files in vector formats supported by Illustrator must be embedded rather than linked.) As linked objects, they can be modified in their parent program and updated in your document. Illustrator does, if you choose, automatically update your document to the latest version of the linked file. Two palettes help you keep track of your linked images: Document Info and Links. Using the Links palette, you can also manage and update your linked images.
When you place an image in an Illustrator document (using the command File, Place), the default setting is Link. Figure 36.2 shows the Place dialog box.