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How important is it to correct Landsat for atmosphere, haze and convert DN to reflectance? What impact does it have on the results, say for many of the vegetation indices?

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The importance of atmospherically correcting Landsat imagery depends, heavily, upon your final goal -- what do you want to do with Landsat products? Unitemporal or multi-temporal processing? Change detection? Mosaicking? In my humble opinion, it isn't always necessary. – Nikos Alexandris Jan 4 at 23:12
The impact it will have, should be assessed in some (statistical) way. A common, I think, method is to check for differences of Pseudo-Invariant surfaces before and after the corrections. You wouldn't want to heavily retouch your images, right? – Nikos Alexandris Jan 4 at 23:16

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Generally the answer is "Quite a large effect", but it can vary significantly. In general - do atmospheric correction if possible, and the best atmospheric correction you can - although I appreciate this isn't always easy.

As for a few more details:

Contributions from the atmosphere to NDVI are significant (McDonald et al., 1998) and can amount to 50% or more over thin or broken vegetation cover (Verstraete, 1994)

(Quote from Song et al., 2001 - available at http://www.unc.edu/courses/2008spring/geog/577/001/www/Song01_RSE.pdf (The Verstraete source is a book which isn't freely available)

In fact, the whole of the Song (2001) reference is a very good answer to your question about when it is useful to do atmospheric correction, and when you needn't do it. It also answers the related question about which method (may) be best to use.

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excellent reference, many thanks – BWill Apr 27 '11 at 4:57
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There are cpf files available. There is more information here. http://landsathandbook.gsfc.nasa.gov/cpf/
Not a real answer but a great reference nonetheless.

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