How do I convert a jpg image into something I can cut?????!!!

[arrydjay 0]

Ok so I bought a refine MH1351 and it came with artcut. First of all I could not get artcut to install on my vista computer, I kept getting an ikernell.exe couldnt run due to an I/O error or something or rather, so I installed it on my XP pc and got it working nicely. Now my question is, How do I convert a jpg image into something that artcut can cut? I have tried the BW to Outline option in artcut, and it works for very simple images like stars and things, but for anything slightly complex like text, it just totally stuffs it up. I have tried using this program called magic outline which is a raster to vector program, but with the same results as artcut. I have corel x4 aswell and with a colour mask it can select perfectly around the image I want. Is there any way to save that and export it to artcut as something that will cut? I also have illustrator CS3 so i can use that aswell if needed. Any help would be greatly appreciated as this is really doing my head in!

[kenimes 42]

Use the Trace Bitmap feature in Corel Draw to vectorize your raster images, then save in .eps format.