image to cad prints

I was asked to give a price for converting hard copies to cad, I priced on
either scaning and tracing in cad or digitizing. I was undercut by a company
who offer vector conversions (I'm not bitter:-). My previous experience with
vector conversions is that they don't work very well, this was some years
ago so they have probably improved somewhat, the output cad drawing had
loads of little lines that made up one big line, it didn't recognixe the
text and also made them loads of lines, by the end of it I still had to
trace over the output drawing which took a similar sort of time as just
tracing over a bmp. Are there better vector conversion programs out there?,
ones which when converting say a rectangle the output drawing has only the 4
lines as 4 entities and not 5000 little lines. any suggestions on which
program I should check out will be greatly appreciated, I'm gonna go on
google as well but were all professionals here (supposedly) so your opinions
would usefull too.
TIA
Mark