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I think SVGs have failed so far on the web because of a sort of "paradox of choice": As soon as you use SVG images, you'll be tempted to make them do things you can't do with PNGs, but you still end up in a world of hurt if you attempt to do this.

Chiefly among these new features are (1) inlining directly into html (2) making them interactive via javascript.

Both #1 and #2 are possible in theory, but in my experience these features are very painful practice... both of these are still very buggy. That's the problem with SVGs: Most of the new "options" they open up are still not ready for prime time.

Most of the new "options" they open up are still not ready for prime time.

I had an article in MSDN Magazine promoting SVG graphics 10 friggin' years ago, and it made use of inline SVG and JavaScript animations, to fantastic effect. Since then I've used SVG in countless places, with very little downside. The major problem are some laggard browsers, but if you have a supporting browser neither inlining and script are a problem whatsoever.

SVG is one of those technologies where many (such as myself) overestimated the short-term impact, and under-estimated the long term impact. As a technology it was usable and enormously powerful in some situations ten years ago, but it is really just starting to gain serious inertia.

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