I believe you are referring to a floating field. This "field" identifies where data will be placed in a text block and will expand or collapse all of the text around it to layout as a single block. This action is triggered when data is merged onto the form. You can do this by importing the data file (this is more of a user one of operation) or if you want to batch it all together you can use LiveCycle Server to do it for you. If you are intending on making the form interactive (i.e. the user can fill in fields etc.) the it is the LiveCycle Forms module that you want to look at. If you are merely going to create the PDF and leave it as non-interactive (like a Print) then you can use LiveCycle Output Server.
If you are still retrieving data from the DB to fill the forms then LiveCycle can do that for you too.
Hope that helps
Many thanks for yur reply
Do you know if we can control LiveCycle Output Server from our .net application. i need some way of looping around the variable fields so i can populate them manually, and then save the document as a PDF. i am sure LiveCycle Output Server can merge and save the data but we need to perform this task in .net via an API
Yes you can .....LiveCycle can be called via SOAP from .Net. You woudl provide the location of the template and the data file and it will return a finshed PDF to you. Then you can do what you want with it.