Yes, a vector based program is always preferred (Illustrator or Corel Draw)
You can download inkscape (
Inkscape. Draw Freely.) this is a free vector program.
You can also download free fonts (dafont.com or 1001fonts.com)
creating shirts in a vector base program is preferred because the images are clear and are the original artwork so your t-shirts will look better. .
NOW!!!! if you don't create something and you copy and paste say a bitmap or jpeg to the page (that is not original) and then add some text. Your artwork isn't all vector mainly the text part only. VectorMagic is really good. If the image is not real clear then you are not going to get a crisp clean vector image.
Go to
Vector Magic Precision Bitmap To Vector Conversion Online so you can understand the difference between a vector image and bmp, jpeg and other formats.
You can find several post here in the forums by using the search tool regarding vector formats..