Well ...
Yes and no, it depends on how you look at it, paths and layers have similar attributes and options, but differ by the ability to manipulate one more than the other. Look at it this way path are like stencils, but with more abilities to manipulate, either coloring the inside or the outside of the path, or increasing or decreasing the proportions of the path without affecting the result image, and layers can be like pieces of paper that have pictures, letters, or other "things". In order to display the content of the path you have to create new layer and have that new layer active, or work in the same layer,but preferably a new layer, and convert the path into a selection by having the path selected and with the dots displaying and hitting enter or just clicking the button selection from path and then filling the inside or outside of the selection, or by just stroking the path in a new layer.
There's one thing I need to clarify because I think I've misled you, and that is, you don't have to create a new layer to create a path, the only time you would need a new layer is when you are stroking the path or filling the selection of the path.
I've come a cross the fact that you can save path in to a vectoring format by exporting the path in to an .svg extension, this way you can open the path/s in GIMP or other open source vector graphics applications(free programs) like Inkscape or Sodipodi, which have more tools that facilitate the manipulation of paths. In order to export a path you have be on the path dock and right click on a single path and clicking on Export, or if you want to you can export all paths by changing the option from only active path to all paths from image. The only reason I'm suggesting that option is that no other program can read .xcf files which are the only ones that save path on GIMP, and the .svg files can be open in other programs.
Hope this clarifies your question about paths and layers, and hopefully I didn't go around your question by having the stencils and paper simile.
If you have more questions you know by now that I will try to answer them.

Alright ...
When it comes to decide on which tool to use, I would recommend brush, but each tool has its advantages and disadvantages, and effects. Generally I suggest to play around with the setting (opacity, brush type, scale, maybe use color gradient and fate out) to come to a definite decision. The type of brush you use also play a important role on your final product, so try out different brush types, or if you want to get new ones, by searching : Gimp brushes, and downloading them to your computer and extracting the .gbr files and placing them on the Gimp's brush folder, you will be amaze at the different brushes out that are out there.
Before you stroke any path, make sure you click on the tool you want to use and set the settings to what you want because it will not prompt any other window.

When you are ready to stroke just go to the path dock and select the second to last icon on the right OR go to Edit - stroke path, and you will get the window and make sure you choose stroke with a paint tool and then hit stroke.
Now it might take many tries to get what you want, you can use the undo and then change the setting and try it over again.
One thing to note when creating a path make sure you check the box Polygonal because it will make the line between the two point will take a shape close to what you are drawing, remember that you can undo each point you create, you don't have to start over, or change the position of current points by changing the mode from Design to edith or move, also create as many points as possible when creating curves, if you want to you can Zoom in with the + key of the numeric keypad, or Zoom out with - key to create point more precise.
Always work with a .xcf extension because it will save all your path, layers and other important information that can edited later, instead of starting all over again, when you have a finish work you can re-save your work as a different extension to summit.
Wish you look on your next work, if you have any other question you know the drill. I'm glad that I'm of some help to you, one thing though I'm not like everyone else, I'm an individual, so therefore I'm different, and unique.

OK I think I have a better idea ...
First I would suggest using the pen tool

to do the tracing and at the same time
you would be creating a path to which you
can go back and modify at anytime, as
long as you save your work as a .xcf file,
which is Gimp\\\'s extension that saves all your
layers, path, and other info to be modify, but
Gimp can read such extension. Now continuing with
the pen tool make sure you check the option for polygonal
it make things easier. Once you create a path with the pen tool
you can stroke the path with pencil, brush, airbrush, or select
everything in side the path or outside depending on your desire,
and fill the selection, on the path, channel, ... dock you can do
the stroking by selecting the second to last icon of the right side
just refer back to the image and look for the path options.
I would work with two layers, one dealing path of the outlines of the
characters of the bodies, and having it fill with one color, and the
second dealing with the path of the lines that define the details of their cloths, face expression, etc.
When using the pen tool make sure you add a
transparent layers that is the same size as the image you are
working with to create the path and only work with that layer.
When working with wallpapers, either vectoring or the normal way
usually people have more than 2 or 3 layers and each layer deals
with individual elements of the entire picture, and its easier to make
changes with out worrying that you have to do something over again.
I have used GIMP for more than 2 years and for me sometimes its still
hard to get things right, and it takes time and practice to get used to
any program, I would suggest hanging there and work in small project with
Gimp so that you become familiarize with it, and try doing some tutorials
to get you going, but if you want you can try and get Photoshop or Fireworks
from Adobe, you have to pay for them, but if you want you can try them free
for 30 days, by creating an account with Adobe, and see if they are easier
or more convenient to you. I\\\'ve used Fireworks at school, but still
prefer GIMP over Fireworks.
Hope this helps, if you have anymore questions you know how to reach me.

Hey just wondering...
Can you list a step by step of what you did
on the wallpaper and vectoring.
Maybe it\'s easier to pinpoint the problem.
I just try something similar to yours
and got a different result than yours,
but I think I used a different process.

It seems that you are confused about Gimp and vectoring.
Let see where to start ...
Answering your messages.
First the tool that you can use really depends on the
situation, and the need and since there are three tool
(pencil, airbrush, brush)I would suggest that you play
around and get familiar with them since there are many
options that can change effects.
Well Sinc(Lanczos3)is a better way of enlarging or shrinking
an image without not lossing much quality.
I didn\'t mean for you to scale it to 5000 and the scale it
back to improve the quality.
It really depends on the quality of the original picture
that you are working with I usually don\'t enlarge my images
more than 1.5 than the original size, but I normally work with
originals that are 1024x768 or greater.
The jagged look can be fix changing brush styles, or the scale
or changing to a different tool.
I would suggest looking at tutorials and getting more familiar
with GIMP, and asking questions.
Maybe join a group in here that deals with vectoring, as extra help,
but you can count on me for some help.
I have a tutorial that can help you learn more about the tools,
and effects.Hope its helpful.
Gimp Tutorial.

I just found another tutorial site.
Tutorialsphere