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VREF is a fixed voltage that defines the input range, eg. 0-3V or whatever.
That needs an external connection to a fixed voltage.
The digital value out represents what proportion of that voltage is measured on the ADC input.
You can use the ADC0820 with VREF - connected to 0V/GND and VREF + connected to +5V/VCC, to give a 0-5V input range.
(The 0804 has those connections internally).
Do not exceed the supply voltage range; you can go lower, eg. 2.5V, but not higher.
The LDR circuit should connect to V IN as with the 0804 version.
There is a possibility you may need to use some logic to hold or latch the outputs while the /INT pin is high after each conversion is triggered, as the outputs float until new data is available. That only matters if you are getting an unacceptable level of flickering or instability on the display.
You could use an 8 bit latch on the ADC outputs and enable or clock data in with each /WR pulse, so it's stable through the conversion time.
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