What is a brownout condition?

A brown-out is a short dip in the power supply. Many microcontrollers have brown-out detection on-chip, often, like in the Atmel AVR, with programmable threshold levels. When a brown-out occurs the microcontroller will be reset.

This may seem a bit drastic, but it's a question of reliability, and safety. If just one of those thousand of gates would lock due to a too low voltage it may lock up the complete controller, or have it go bananas, that it still runs, but produces nonsensical results and performs ditto actions. You don't want that, especially not where the microcontroller controls industrial equipment. That's why a brown-out situation always has to be responded to predictably. The DAC does this by shutting the outputs off, which you can expect to be the least harmful behavior.

A brownout is a droop in the power supply voltage, not all the way down to zero, but well below the nominal minium.

For electronic components (especially complex chips like microcontrollers) a brownout is a power voltage level between the minimum reqired for normal operation, but above the level at which the chip does not work at all. In this dangerous in-between zone 'anything' can happen. Most datasheets specify a maximum duration for the rise from some very low level (let's say 0.8V for a 5V chip) to the minimum operational level.

For industrial applications 'anything can happen' is often not an acceptable situation. (Imagine exploding chemical reactors etc.) Hence the need for brownout-reset chips, power regulator chips with a power-good output, controlled sequencing of power supply lines, etc.