LiveTrace must have given you the 1500-pixel-warning when you tried to trace the artwork. You should take it seriously. I have done some testing of the function and it didn't deliver better results with higher resolution images. Accuracy is not all, you should also try to get clean, smooth paths out of it. Those result in fewer anchor points, are easier to edit and look nicely.
Vectors will of course keep the quality when you blow it up afterwards.
It didnt give a 1500px warning, all it did was say it may take a while and I may not be able to use my system while it is running.
Basically I am trying to trace a cup of frozen yogurt with berries. So the berries have a ton of texture so a little imperfect area here and there, no big deal... but when it comes to the yogurt, with its twists and turns, the gradients have to be a lot smoother and its not with the regular hi res photo option, and is much better when custom min area is set to 5 or less. It seems at min area of 7px or more allows it to run smoothly though, which I may have to settle for.
But again this is for a rather large poster, so would it help at all to downsize the image and then blow it up again after live trace? The original image is perfect for use in the full sized poster right now. Or will doing this ruin quality even after made into a vector?
Don't expect a photorealistic result when tracing a photo. Live trace won't be able to deliver that. It is limited to 256 colors. It can't make gradients. If you want to get a photorealistic drawing, then do it manually.