To everyone that keeps asking for a interference on/off switch for tracing over a photo or a drawing:
I have the ultimate workaround: DO NOT USE SKETCHUP FOR THIS.
To put it plainly, it's been asked for years and the developers do not care for this option.
Just use any 2D drawing package. Just about all CAD programs will let you import a photo and you will be able to trace a polyline over it easily.
THEN IMPORT THIS INTO SKETCHUP.
Sketchup is a 3D drawing package, don't use it for 2D work.