Quote Originally Posted by Wondergirl View Post
It is best to place in AI file so the smart object layer is vector object .If you open and AI with Photoshop does not support AI files .
For Photoshop will treat the AI file as if it were a ESP of PDF file and open its contents as a pixels layer which will not resize well.
However you can have Photoshop scale the layer well during the open.

You could alternatively place an .AI file in an existing Photoshop Document using FILE> PLACE Using the place method, the .ai file is retained as a vector smart object within Photoshop