Photoshop :: Turning A Line Drawing Into A Shape Object?

I am using CS2.

I have a line drawing of a simple object that I would like to convert into a shape.

I have figured out how to cut the shape itself out of the original image using the magic wand select tool thing and altering the tolerance. So I have the cut-out shape on a transparent layer in a .psd file. All well and good.

I looked up "shapes" in the help center, and it says this:

"To convert type to shapes

When you convert type to shapes, the type layer is replaced by a layer with a vector mask. You can edit the vector mask and apply styles to the layer; however, you cannot edit characters in the layer as text."

It continues:

"Select a type layer, and choose Layer > Type > Convert To Shape".

Everything was going swimmingly untill that point - I go to the Layer menu - but "Type" is greyed out and therefore inaccessible.

I then did a search for "type layer" to find out what a type layer was - it says:

"About type layers:

After you create a type layer ...

tell me what a type layer is (I figure it has something to do with font, but I don't see how this relates to my line drawing), how to create one, or how to get my drawing into a type layer so I can convert it to a shape!