DN is the 'digital number' or pixel value you would like to use for determining the borders of your vector layer.  The conversion to vector most often occurs when you have a classification image where the pixels are represented by discrete values of class 1-n.  It is also common to convert digital elevation models (DEMs) to vectors but even in this case, it is not common to convert *every* elevation value so ranges of values are used to create contours. So the question is what sort of data to you have?  Do you have continuous, heterogeneous pixel values?  If so, where should the vectors be drawn?  Should you create a vector layer for every pixel value? For a range of pixel values? If you have a large range of data, perhaps an option might be to apply a density slice (range of pixel values) to the band of data (available from the Display menu under  Tools ->Color Mapping ->Density Slice) and export the resulting classification image to a series of vector layers using Vector ->Classification to Vector.

Thanks for the reply. Basically I have overlayed 2 Landsat 7 images using COSI-Corr and I have used Band Math to work out hypotenuse lengths and angles, however the file containing angles I need to have converted into a vector file so I can import it into ArcGIS. I need one file containing all of the pixels. Thanks

Is there a reason why it needs to be in vector format?  Vectors are not very efficient for this type of data.  ArcGIS 9.3 can read ENVI formatted files directly (you may need to apply a stretch to the data via Symbology).  You could also export the file as a TIFF and import this to Arc.

I will need to change the file when imported in Arc so I can arrows, this will shows direction of glacial movement.

If you want to convert every pixel value in the image to a vector layer, then you can run Basic Tools ->Statistics and calculate the histogram of the file.  Then for every pixel value, enter this as the 'DN' in the Raster to Vector tool.  Once converted to ENVI vectors, you can export them to ESRI shapefiles.

Thanks for the advice, so every value has to be entered into the DN value screen? How do I then export the vector file as an ESRI shapefile? Thanks

Yes, that is the only way to get *every* DN converted to a vector.  The vector will be created in the Available Vectors List and you can choose FIle ->Export to Shapefiel.  I would think that there should be a way in Arc to do what you want to do with a raster which would be much more efficient. 

I've actually managed to add it in with a slightly different method, using the slice method you mentioned above

Sir I have done edge detection in MATLAB of SPOT image. The output I have is in TIFF form and it is binary with '1' representing the boundary line. The problem is that when i am converting it into vector and want to find the area, it is mentioning the area of the boundary line instead of the area contained inside the polygon. The boundary line in too thick. How can i reduce the thickness of this boundary line in ENVI 5 so that only the inside polygon area is considered?