What is the difference between a text-based and an image-based PDF file?

An imaged-based PDF is a document that captured the original source document as a snapshot. There is no metadata linked to the PDF. Therefore, there is no ability to perform high-level PDF functions such as search, find, make comments, etc. A text-based PDF is a document created by converting a digital document previously created using a word processor (such as MS Word, Word Perfect, Open Office, etc.) into a PDF. Text-based PDF files allow functionality such as copy-and-paste and keyword searches.

USPTO FAQ - Questions and Answers (2007JUN01)