Vacation mode is 'activated' by clicking the Vacation Mode button in your user settings.
When you click this, a 48 hour grace period is activated, during which time, game play is exactly as normal, except that you are unable to attack other players (NPC villages can still be farmed as before and ghost cities may be attacked and conquered).
Once this 48 hour period is up, your account enters Vacation mode proper, and you are unable to login for at least 24 hours. If you try you will get a warning message telling you how much time is left before the 24 hours is up. After that 24 hours is up, you may end vacation mode at any time by logging in.
During the 48 hour grace period, you can be attacked as usual. During vacation mode proper, no other player may attack you. In addition, you're unable to get any resources during vacation mode either by your production buildings, or by a trade.
Your advisors will still run even if you go into vacation mode. They will auto renew as long as you have gold in your account.
If activated, it is activated on ALL WORLDS- Not just the one that you activated it on. I.e. I play Alpha and Beta, I activate Vacation Mode in Alpha. I will also be activating Vacation Mode for Beta.
Each year, you get 42 vacation days. A new year starts the day you registered on your first world.
Example: you registered on the 3rd of June 2010, the next year (for you) will start on the 2nd of June 2011
You may buy up to 14 vacation days for gold. One vacation day costs 50 gold.