InkScape is an open-source alternative to Adobe Illustrator. It uses SVG – Scalable Vector Graphics which is XML based. You can download it here. Tavmjong Bah is working on an InkScape book. You can view his preliminary copy on his web site.
Here’s a sample of the type of illustration that can be created using this program:
This is a perfect companion to GIMP (GNU Image Manipulation Program) which is an open-source program similar to Adobe PhotoShop. GIMP is excellent for photo manipulation.