The most elemental form of vanilla, whole beans aren't cheap--but they're perfect for when you want to infuse a dish with big, pure flavor and let vanilla be the superstar. When shopping look for plump, supple, shiny pods and use them within a month or two as they will dry out and lose potency over time. To use, split a pod down the middle with a knife and scrape out the seeds. But don't discard the pod: it's still full of flavor and can be added to a jar filled with sugar to make your own vanilla sugar.
The most commonly used (and most inexpensive) source of vanilla flavor, extract is made by using vanilla pods to infuse a mixture of alcohol and water. Extract is great for when you want to add subtle flavor to recipes like sugar cookies or whipped cream. But when shopping, make sure to look for extracts that are labeled "pure"--the other stuff can have a fake, chemical taste.
Though less commonly used than beans or extract, vanilla paste offers some of the best of both worlds and is becoming more available at specialty food and baking supply stores. Made by combining powdered vanilla bean with extract to create a syrupy paste, it's a great way to add balanced vanilla flavor--and those eye catching "flecks"--to things like pound cake or ice cream.