Ghostscript is a program specifically designed to take a PDF file and convert it using one of several 'devices' as a method for creating output. These devices can vary from TIFF encoders of various type, to JPEG and PNG, and even back to PDF. Islandora uses Ghostscript to take the individual PDF datastreams of each page of a Paged Content collection and concatenate them into a complete PDF that can then be appended to the Paged Content collection itself as a PDF datastream.
The latest version of Ghostscript can be downloaded at the official site: http://www.ghostscript.com/download/gsdnld.html
Ghostscript can be compiled from source, or the binary from the download page can be installed and run. Islandora's Paged Content module simply requires the path to Ghostscript to run, so in most cases, that binary is all that is needed.
For many Linux installations, Ghostscript is either included with the operating system or can be installed from a package manager. For example, on Debian- and Ubuntu-based distributions, Ghostscript can be installed by running:
sudo apt-get install gs
Check the Islandora Paged Content page for more information on how to integrate Ghostscript into Islandora.