It does not “Magically turn it into a vector”
– When you scale up that small .ai file, it merely *treats* it like a vector file, i.e. does not try to anti-alias it. This is not a treatment which suddenly creates resolution where there is none, this is a treatment which when you scale up a bitmap will give you large, sharp squares for each bit as opposed to those terrible AE anti-aliased blurs.
This treatment carries on through to the render stage at full quality renders, very useful for making 8-bit animated characters, even in 2.5D with lights affecting the layers.
Just give it a go, my money has already been put on the table and I don’t bluff.
Luke