I have this road map in Nepal as an image within a pdf, distinguishing different types of roads by colors or line type. I am trying to make a shapefile from the image. What is the best practice converting an image to a shapefile? Ideally, I would like to work in R, where I do most geospatial analysis.
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This is the non-trivial task of vecotorizing a raster image. A popular open surce software for this task is potrace. There is even a wrapper named geotiff2shp for potrace for generating Shapefiles.
Note that you might first need to seperate the different streetmaps by color. If the image uses antialiasing, you should do a color quantization before to make sure that every street type only uses a single color. Color quantization can be done, e.g. interactively in Gimp by converting the image type to "indexed".

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