With the help of this script, a selected PDF or PS-file is being converted into a Djvu-File using a program called DjvuDigital. DjvuDigital has to be compiled from source, which you may find difficult. By default, the script creates a Djvu-file with a resolution of 300 dpi.
You can find out all about DjVuDigital here: http://djvu.sourceforge.net/gsdjvu.html
Read more about the Djvu file format here: http://djvu.org/