Why Cutout?
The most frequent use of the Cutout filter is for creating cartoony-style graphics and vector art. The first also goes by the name of Clipart. Vector art is something more technical and is frequently used in posters and commercials. There is even a movie made entirely of vector art graphics.

Pros
One of the main aspects of this filter is that it reduces the complexity of the image. If you want to impress the audience with "five minute" clip arts then this is the filter for you.
Also, if you want to create quick, light and easy to go posters you should definitely try the filter. The size of a 1200x2000 document is around 600kb.
Last but not least, it is easy to use. Forget about all the switches and twitches. All you have to do is go to Filters>Artistic>Cutout. From there on, it is a matter of sliders and eye-contact to achieve the desired effect.

Cons
If you want to create vector art, I suggest you arm yourself a lot of patience. The main downfall of the Cutout is that you have to twitch it and painstakingly set the sliders to a value that will create good quality vector art.
Furthermore, the filter creates "vector art" not vector art. Vector art can be scaled up to any size. "Vector art" cannot, as it is as big as the photo you are working on.

To sum up...
If you want to impress the world with fancy clip or posters then you've got the tool. However, if you are looking for means of creating large vector art, then I suggest you seek a better alternative.

• Fresco