You can "place" a Photoshop image into an Illustrator document, or place Illustrator artwork into a Photoshop file a using the File > Place command found in both programs. This is the most traditional method of moving a file from one program to the other. The only issue of concern is that the image or artwork must be in a file format readable by the other program.
Photoshop is very good at reading multiple file formats. Illustrator is a bit more limited in the formats it understands, but once a Photoshop file is in a readable format (e.g. TIFF, GIF, JPEG, etc.) you can simply use the File > Place command and select the image. Illustrator will place the desired image inside of the Illustrator file, and you will have some ability to manipulate the file within Illustrator.
Another way of moving a Photoshop file into Illustrator (or vice versa) is with the Clipboard. Just copy the file essentials you want from one program with the Copy command and paste it into the other program with the Paste command. There are limits to the Copy-Paste method however. This method does not work well for large files and you can easily overload the receiving program by pasting a large file into it.
The third method for introducing a file from one program into the other is dragging and dropping. If you want to take Photoshop art and put it in your Illustrator file, both programs must be open. Select the artwork you want to transfer, and simply drag it out of the Photoshop window onto the Illustrator window. To take Illustrator art into Photoshop, simply select the artwork from an open Illustrator window, drag it to an open Photoshop window and drop it into Photoshop.
You can also place paths from Photoshop into Illustrator files. Using the Path Selection tool in Photoshop, select and copy the paths you want to move, then paste them into Illustrator.
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