Ok...best way I can describe it is like putting together a quilt, but with a mouse, on the computer, in Illustrator CS.
You have the pattern (the picture) and the pieces (the pixels within the picture).
I blow up the picture on my monitor to 1200-4800% enlargement, which gives me a very small section to see and work on. Now, each pixel is a different hue within the context, so I determine what I want that context to look like finished-maybe I'll use a gradient and a pen tool or seperate 10 or 30 pixels and use a central hue and the pencil tool, then draw over it using the mouse ( and I'm a lefty, doing this with my right hand to further confuse you
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) I then pull back to about 400% and refine the section. I do this until the bike looks like a bike. (The yellow background is to show me where I screwed up). 90% of the time I use the eyedropper tool to choose the colors I need. In the case of the previous bike, much of the chrome had to be done by choosing from color pallets because it was reflecting its surroundings-red car, a man, green trees. Since this one is a promotional photo, it's completely devoid of those distractions.
After the detailed bike is done, I draw it a second time, only with no detail-all the black is black, blue, blue, etc and place that second bike under the first drawn one.
Now I have a solid drawing.
Once the bike itself is done, I then select the entire finished piece, put it into Photoshop and construct a scene around it.
The picture here shows the outlines of each drawn section, in blue:
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It is a form of tracing as the photo is behind the drawing, but the drawing (or tracing) is interpretive. For instance, the original photo had the word Sportster across the tank(not seen here because I'd filled in the tank and didn't save the original as it was).
The movie, Polar Express, among others, is a 'traced' film, much the same way the bike illustrations are, but, of course in a MUCH more detailed and ambitious way. It was filmed completely live with the actors, then computer-traced frame by frame.
Hope that clears it up!