Vectormagic has had this service for a long time now. In the beginning it was free. Now you can even buy their program. It comes with a cavat though.

If you trace by hand you get a small and light-weight file that is easely editable.
With Vectormagigic you get a LARGE and CLUMSY file that are so complex that it is in princip uneditable.

Vectormagic does not use any of the advanced techiques in Illustrator for instance like you can see here,

smashingmagazine.com/2007/08/21/creativity-spark-from-masters-of-graphic-design/

In other words, the usual difference between hand-made quality and machine-automation. You cant do anything with it except print it out. And even that can be a problem.