Illustrator Pathfinder issues

[visual_zenith]

I have 2 objects in AI that I have embedded so that they are not "linked images".  I try to go to Pathfinder to subtract the sailboat from the sunset image (both objects are selected) but I keep getting an error message saying "The filter produced no results. Please select two intersecting paths." 

What am I doing wrong?

[Ton Frederiks]

It does not work with images, you need vector paths.

[Ton Frederiks]

Try first vectorizing them using Image Trace, expand and then try the Pathfinder option.

[michelew83603738]

I am not exactly clear what you want to do. You want it so that there is a cut out of the sailboat in the sunset? If so, you must have paths, but you still have a pixel based image. You can use Image Trace to create vectors, clean up the image if necessary, and then use the Pathfinder Commands to subtracat the sailboat from the sunset.