Outline font
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An outline font (or "vector font") is one defined as vector graphics, i.e. as a set of lines and curves to define the border of glyphs, as opposed to a bitmap font, which defines each glyph as an array of pixels. Examples are PostScript (Type 1 and Type 3 fonts), TrueType and OpenType. Outline font characters can be scaled to any size and otherwise transformed more easily than a bitmap font, and with more attractive results, though this requires a lot of numerical processing. The result of transforming a character in an outline font in a particular way is often saved as a bitmap in a font cache to avoid repeating the calculations if that character is to be drawn again.
An "outline font" is also a style setting in some desktop publishing software. It allows for just the outline of a font to be printed with a shadow for a 3d effect.
[edit] Reference
Article based on outline font at FOLDOC.