Vectors or rasters do not line up in ArcMap.
Several causes and solutions may exist.
Undefined coordinate systems
The vector or raster does not have a coordinate system defined. Examples of vectors are: shapefiles, coverages, and geodatabase feature classes. Rasters include: .TIFF, .JPEG, MrSID, and Grid.
If either the vector or raster do not have a coordinate system defined, the following warning appears when adding them to ArcMap:
"One or more layers is missing spatial reference information. Data from those layers cannot be projected."
The warning can be avoided by verifying that all of the layers added to ArcMap have correct coordinate systems defined in the spatial reference. When selecting the Properties of the vectors or rasters, verify the Spatial Reference property is not 'Undefined'.
Define a coordinate system for a vector or raster using the ArcToolbox Define Projection tool by way of: ArcToolbox > Data Management tools > Projections and Transformations.
Incorrectly defined coordinate systems
The vector or raster is defined with the incorrect coordinate system.
Verify with the data vendor or data provider that the data is in the correct coordinate system. It is difficult to identify which coordinate system the data is in by examining the extents of the dataset.
An incorrect Transformation is set for the Data Frame.
If datum are in different coordinate systems, there is a possibility that these coordinate systems are not directly compatible and a mis-alignment may result. If this is the case, the following warning may appear when adding raster or vectors to ArcMap.
Set a Transformation to fix the mis-alignment. Transformations are set on the Coordinate System tab of the Data Frame Properties.
Projection-on-the-fly: Raster Only
The raster layer is being projected-on-the-fly and the Data Frame is rotated.
Currently, at ArcGIS 9.0 Service Pack 1, there is a known issue that does not allow the display of a raster dataset or raster catalog when the Data Frame has a different coordinate system and it is rotated.