From what I've observed, one SVG file works perfectly to replace a bunch of PNG files (ie. using only nautilus.svg instead of 7 PNG's of different sizes) with out a loss of quality. Is there a specific reason why icon themes supply both? I'm thinking of putting an icon theme together and I don't want to have to make a bunch of different sized PNG's. Thanks
SVG, despite the name, is not infinitely scalable. There is a loss of quality when scaling beyond certain thresholds, just as there is when scaling PNG. Single SVGs would be nice, but the icons would still need to be drawn at multiple sizes to have sharp lines with less detail at smaller sizes, while having much detail at larger sizes, such that scaling would simply result in a different layer of the SVG getting rendered.
The best way to build an icon theme is to use the single-SVG workflow of Tango, like the upstream GNOME theme uses, and have a build system which uses something like icontool to split out the various regions of the canvas into the proper PNG icons in a directory. You will still need to draw the multiple sizes to have the best possible looking theme, but having all the icons in a single canvas makes it easier to maintain consistency across sizes.