I make custom tshirts along with a lot of different things that relate to signs. In my shop we mainly use Photoshop and illistrator to make custom shirts. There are many different methods depending on what you want to do for instance are you trying to do heat transfers (I would use photoshop, illistrator). You can do screen print which is all vector work and would use illistrator. You can even do vinyl heat transfer which you would also need to vectorize and then you would cut this out in a plotter. Hope this helps.
Well, vector is scalable, and sometimes more suitable for t-shirt designs. But photoshop works fine too. it really doesnt matter. You might want to take into concideration if your t-shirt printing company charges more for more colors and how large your image can be.