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ARC/INFO is a powerful software package put out by ESRI, the same company that makes ArcView. It runs on UNIX mainframe systems, PCs, and other platforms, and is generally command-based (you type most commands into a prompt) as opposed to windows/GUI based (although this is changing with newer releases). ARC/INFO's spatial data storage format is based on a conceptual model called arc-node topology. This model has firm rules for the relationships between spatial features. Arcs (which are lines that can have many vertices, or corners) have two endpoints, called nodes. One is the beginning point or 'from-node', the other is the end point or 'to-node'. Thus the arcs have a direction. In a polygon coverage (a datalayer consisting of two-dimensional shapes), the spatial data is stored as arcs which connect to each other only at their nodes. The arcs cannot cross or intersect each other and no arc can have one of its nodes (endpoints) dangling (unconnected to another arc's node). In this way the arcs form closed shapes, which are polygons. Each closed shape must also contain one and only one labelpoint, which is what any tabular or attribute data (table-based data, like a .dbf file) is affiliated with. In this way, attributes are linked to the polygons with each polygon associated with one row in the attribute table. Arcs also have an attribute table. Each arc has a left-poly and a right-poly (the polygon that is on the left-hand side of the arc, traveling from the arc's from-node to its to-node, and the polygon on the right-hand side), and this information is stored with the arc. There is one special polygon, the Universe polygon, which is the polygon that consists of all the space that is not part of the other polygons. Imagine a coverage of the United States where each state was a polygon; the Universe polygon would be everything outside of the U.S. of A. This polygon is like the others except it has a negative area and no labelpoint. A polygon coverage therefore contains several different features: arcs and labelpoints and the polygons built from them, plus other features sometimes, which are not described here. The polygons don't exist until they are 'built' using the BUILD or CLEAN commands, which create certain aspects of the aforementioned topology, like the left-poly and right-poly, etc. In ArcView, you can view each of these coverage features separately; if you add an ARC/INFO coverage to your View as a theme, you have to choose between loading the polygons or the arcs or the labelpoints, etc.
ArcView's native data storage format, the shapefile, by contrast, can hold only one feature type: either points, polylines, or polygons. These features are stored without any topological relationships between them; a shapefile is simply a list of shapes, each of which is stored as an x,y coordinate pair (in the case of points) or a sequence of x,y coordinate pairs each of which represents a vertex (in the case of lines and polygons--in polygons, the first and last point is the same). One feature (which is linked to one line in the attribute table) can actually contain several discrete lines or polygons, and in the case of polygons, there can be polygons with holes in them (like a donut) or even several overlapping polygons. There is no Universe polygon. There is no reason why features can't overlap each other, since they are just stored as a series of unrelated shapes. This way of storing spatial data has some advantages, but it has problems, both for certain types of analysis and for being an accurate way of representing map concepts such as land ownership, where no overlaps can be permitted (for example, states have discrete boundaries; there is no place (hopefully) where 2 states both own the land). It is difficult to develop topological polygon data using out-of-the-box ArcView since there is no mechanism for maintaining the shapes' relationship to each other like in ARC/INFO. The tools in this group of dialogs help you to develop polygon data with proper topological relationships.
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