In a modern system a foo.eps file in \includegraphics{foo}, if present, is automatically converted to foo.pdf during pdflatex run.
This conversion is done only once, so foo.pdf is left for the next runs. If you change your eps file, it will be regenerated.
Consider this example:
\documentclass{article}
\usepackage{graphicx}
\begin{document}
\includegraphics{tmp1}
\end{document}
When I ran it, I had file tmp1.eps, but no tmp1.png or tmp1.pdf in my working directory. The log said:
(/usr/local/texlive/2011/texmf-dist/tex/latex/latexconfig/epstopdf-sys.cfg
File: epstopdf-sys.cfg 2010/07/13 v1.3 Configuration of (r)epstopdf for TeX Liv
e
))
Package epstopdf Info: Source file: <tmp1.eps>
(epstopdf) date: 2011-12-12 13:41:25
(epstopdf) size: 15351 bytes
(epstopdf) Output file: <tmp1-eps-converted-to.pdf>
(epstopdf) Command: <repstopdf --outfile=tmp1-eps-converted-to.pdf
tmp1.eps>
(epstopdf) \includegraphics on input line 4.
runsystem(repstopdf --outfile=tmp1-eps-converted-to.pdf tmp1.eps)...executed sa
fely (allowed).
Package epstopdf Info: Result file: <tmp1-eps-converted-to.pdf>
(epstopdf) date: 2011-12-16 14:36:28
(epstopdf) size: 7774 bytes.
<tmp1-eps-converted-to.pdf, id=1, 346.00266pt x 37.00826pt>
File: tmp1-eps-converted-to.pdf Graphic file (type pdf)
<use tmp1-eps-converted-to.pdf>
Package pdftex.def Info: tmp1-eps-converted-to.pdf used on input line 4.
(pdftex.def) Requested size: 346.0018pt x 37.00815pt.
as you see, the file was converted. Then I ran pdflatex again:
Package epstopdf Info: Source file: <tmp1.eps>
(epstopdf) date: 2011-12-12 13:41:25
(epstopdf) size: 15351 bytes
(epstopdf) Output file: <tmp1-eps-converted-to.pdf>
(epstopdf) date: 2011-12-16 14:36:28
(epstopdf) size: 7774 bytes
(epstopdf) Command: <repstopdf --outfile=tmp1-eps-converted-to.pdf
tmp1.eps>
(epstopdf) \includegraphics on input line 4.
Package epstopdf Info: Output file is already uptodate.
<tmp1-eps-converted-to.pdf, id=1, 346.00266pt x 37.00826pt>
File: tmp1-eps-converted-to.pdf Graphic file (type pdf)
As you see, no conversion was done.
Then I changed my tmp1.eps and run `pdflatex again. And the log said:
(/usr/local/texlive/2011/texmf-dist/tex/latex/latexconfig/epstopdf-sys.cfg
File: epstopdf-sys.cfg 2010/07/13 v1.3 Configuration of (r)epstopdf for TeX Liv
e
))
Package epstopdf Info: Source file: <tmp1.eps>
(epstopdf) date: 2011-12-16 14:40:16
(epstopdf) size: 620519 bytes
(epstopdf) Output file: <tmp1-eps-converted-to.pdf>
(epstopdf) date: 2011-12-16 14:36:28
(epstopdf) size: 7774 bytes
(epstopdf) Command: <repstopdf --outfile=tmp1-eps-converted-to.pdf
tmp1.eps>
(epstopdf) \includegraphics on input line 4.
runsystem(repstopdf --outfile=tmp1-eps-converted-to.pdf tmp1.eps)...executed sa
fely (allowed).
Package epstopdf Info: Result file: <tmp1-eps-converted-to.pdf>
(epstopdf) date: 2011-12-16 14:40:21
(epstopdf) size: 19423 bytes.
<tmp1-eps-converted-to.pdf, id=1, 241.90375pt x 188.705pt>
File: tmp1-eps-converted-to.pdf Graphic file (type pdf)
<use tmp1-eps-converted-to.pdf>
Package pdftex.def Info: tmp1-eps-converted-to.pdf used on input line 4.
(pdftex.def) Requested size: 241.90315pt x 188.70453pt.
As you see, now the file was regenerated!