Vector images consist of shapes, like circles, rectangles, lines and curves. Each shape is typically made up of a sequence of primitive cursor-based draw operations: move cursor to a point, draw a line to a point, draw a curve with some control points to a point. These shapes are then stroked and / or filled to create the artwork.
Stroking means drawing the outline of the shape with some line thickness and some color. The colors used can be either regular solid colors, or various types of gradients.
Having the image information in the form of these shapes allows you to scale the image however you like without losing quality, and to do things like have a computer controlled device take a piece of material and then cut it, sew a pattern on it, paint it, etc.
This is in contrast to bitmap images where the image information consists of a grid of pixels and the color values at each pixel. These scale poorly, and for applications where you need to e.g. cut, sew, draw, etc, this is insufficient.
You can draw the same image in many ways using various shapes and sequences of stroking and filling. Depending on what you're trying to achieve, you may need one arrangement instead of another.
When an artist creates a piece of vector art from scratch, they may layer the shapes in various ways to suit their composition, and then use combinations of stroking and filling to create the final design. Results produced by Vector Magic come in two flavors: fill only, or stroked and filled.
This is the most used output mode, where the shapes are filled but not stroked.
Good for vector-based printing and cutting methods, like vinyl cutting, laser engraving, and embroidery as it will only cut once per shape. May still cut twice per edge as most edges are shared by two shapes.
Simpler file, compatible with the most viewers.
May have thin white lines in buggy viewers. Most viewers are buggy.
Fill only
This is a workaround for buggy viewers that render thin white lines around shapes that are only filled. All shapes are first stroked, then in a second layer they're all filled. This eliminates the white lines.
Good for display purposes as it renders without thin white lines, even in buggy viewers.
More complicated file that may be incompatible with older viewers.
May cut twice per shape when used for vinyl cutting, laser engraving, embroidery, etc.
Stroke
Fill
Stroke + Fill