The Normalise vector node takes a vector as input and outputs the same vector with a magnitude (length) of 1. It does this by dividing the vector by its length so that its new length becomes 1. This is often referred to as a unit vector. Essentially, it rescales a vector to a length of 1, without changing its direction.
The following example is for illustrative purposes only. An EXR image supplies vector data to displace the planet surface. The vector data is first passed to a Normalise vector node prior to being passed to a Vector to colour node because some of the vector values will exceed the visual range, 0 to 1 or sRGB 0 - 255. Once normalised, the vector data is then converted to colour via the Vector to colour node.
A vector is a set of three scalars, normally representing X, Y and Z coordinates. It also commonly represents rotation, where the values are pitch, heading and bank.
Literally, to change the position of something. In graphics terminology to displace a surface is to modify its geometric (3D) structure using reference data of some kind. For example, a grayscale image might be taken as input, with black areas indicating no displacement of the surface, and white indicating maximum displacement. In Terragen 2 displacement is used to create all terrain by taking heightfield or procedural data as input and using it to displace the normally flat sphere of the planet.
A single object or device in the node network which generates or modifies data and may accept input data or create output data or both, depending on its function. Nodes usually have their own settings which control the data they create or how they modify data passing through them. Nodes are connected together in a network to perform work in a network-based user interface. In Terragen 2 nodes are connected together to describe a scene.