2. Create a New Illustrator Document
Open a new Illustrator document (it can be any size) and make sure it’s in RGB mode. We’ll be tracing an RGB image, so it makes sense that the LiveTrace feature will work better if the document is in RGB also. (Don’t panic, you CMYK freaks, we can change our colors to their CMYK equivalents later on.)
Let’s use the Basic RGB New Document profile (see Figure 2). This profile is new to CS3 and can be particularly helpful when designing for mobile devices and video. Place your image anywhere on the page; we’ll only delete it later on, anyway.

Figure 2 Creating a new Adobe Illustrator CS3 Document in RGB (note the New Document Profile: area)