My opponent and I are 22 moves onto our game, (been playing for the past couple hours) when the following notice appears:-

Your opponent is currently on vacation! They have 1 month of vacation time left, but may be back sooner.

Yet he is still shown as as online, How come???  Am I missing something here????

Barring any technical glitches, your opponent clicked the vacation option, and it just means his games are on hold until he unchecks that option.  He or she can still go online though; perhaps he got tired playing, or perhaps he's really on vacation.  The best way to know is to send him/her a message.  You can see this vacation option while you're online game is shown (when you're playing): click the "change board settings" link.

well, your opponent can say that he is on vacation so that he won't lose on time if he's getting low on time.  At the same time, you can be on vacation and still be online.

I'm likely to do the same thing next week. While I'm out-of-town on business I won't have time to play moves in my correspondence game, but I probably will have time to reply to messages, notes, and comments. Of course, I'll tell my opponent that in advance so he's not wondering what's happening.  :)