To turn it on, go to online chess, and settings. You have to have moved in all your games first. If you were a premium member it would turn on automatically when needed.
I think you start with 7 days and accrue extra over time.
Presumably if you turn vacation on when you have, say, 3 days left to move, then you will still have 3 days left when you turn it off or it runs out a week later. But I can't confirm this.
How much vacation can I get?
Here:
http://www.chess.com/membership.html?c=vacation
it says that basic members have 30 days, but in my profile I have written "8 days of vacation remaining"!
Anotehr thing, how do you choose, how much vacation you take? For example, if I want to take 1 day, how do I do it?