In Xara Xtreme its called "bitmap tracing", and the ease, tweak-ability, speed and for the clean results - is one of the reasons I initially purchased the software in the first place, having tested the free download version originally.

It does a far better job than Adobe Streamline, and the built-in vectorization in other drawing programs like Corel, that I've used.

In fact I can adjust the tracing level so the results look more like an oil painting than a raster or vector image.

You can trace in monochrome, grayscale, limited color or full color and offer multiple passes in order to capture highly detailed bitmap images. Once processing is completed it shows a thumbnail of the finished trace - if it looks wrong, then make adjustments and trace again. Once right insert image, done.

Not trying to keep on promoting Xara, but these nice little functional proggies you find all seem to have functions existing in Xara, so no need for me to use something else.