Making a log print-ready in Illustrator

How do I make a logo, that includes an image from photoshop, print-ready in illustrator?  Do I need to do something with the image?

Printfusion, I'm new.  So, please, bear with me on this.  This is only my third client, and I'm still learning a lot.  (Yikes!) 
A client wanted an image of a little boy, which is already in her present logo along with the copy, to be updated with a different colored shirt, different hair cut, etc.   I edited the image to her satisfaction.  Then I placed the edited image in Illustrator and redid any copy to her satisfaction.  So all the changes in the logo have been completed to her satisfaction.
Then I was just going to package the completed project like I've normally done before for my clients (.eps, .png, .tiff, and a favicon/iPad/iPhone-a little extra thing) and send it to her with instructions for disbursement to the various people - printer, webmaster, herself.   Well, it DAWNED on me that probably I couldn't do that with an image included unless I outlined it and whatever else I needed to do to it first.  (I know.  Like I said, I'm just starting out.  So forgive my ignorance.) 
Thank you so much for any help you can give me.  I appreciate it!

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