Classifying point density based on proximity

Discussion created by Hydronaut on Feb 24, 2013
Latest reply on Feb 25, 2013 by curtvprice
Hi everybody,

I have a point shapefile I wish to classify into density categories based on their proximity to one another.

For example:

Does anybody have an idea which tools would be best suited to performing this task?
Is it possible to do with vector data, and not raster?