Tracing allows you to convert bitmap images into vector objects. This allows them to be cut or edited using path-editing tools. The tracing area can be limited by a marquee.
A bitmap that has been masked cannot be traced until it is unmasked first.
After tracing the bitmap, if you want to hide the bitmap to see just the traced paths, click the Preview Bitmap tool on the View toolbar [??], or select Preview Bitmaps from the View menu.