I have imported a simple black and white shape ( state of texas) into inkscape.

I cannot figure out the next step.

How do I trace, convert, whatever this image into something that I can actually do something with?

Well, the next step depends, at least partly, on what you are planning to do with it.

It also partly depends on the image itself. If it's solid black and solid white, you can probably auto-trace using Path menu > Trace Bitmap to convert to vector. But without seeing the image, it's hard to say for sure which way would be best. (http://tavmjong.free.fr/INKSCAPE/MANUAL/html/Trace.html) Auto-tracing is relatively quick, but doesn't usually provide a lot of detail.

Or if it's not a good image for auto-tracing, you could trace "manually" using Inkscape's Pen/Bezier tool. Help menu > Inkscape manual
(http://tavmjong.free.fr/INKSCAPE/MANUAL ... ths-Bezier) Hand-tracing can provide amazing detail, but takes a little longer (depending on image quality).

I'm getting really close to finishing a series of tutorials on converting raster images to vector. But I still have 1 or 2 left to write, before I can release them. I'll try and remember this topic, and when they're released, I'll add a link to the series.

I tried the trace bitmap but all it does is say to select an image ( which is already selected) and nothing happens.

btw, this is the image I am trying to trace.
http://rlv.zcache.com/texas_in_white_an ... r_1024.jpg

Here is a mini tutorial:

http://goinkscape.com/how-to-trace-a-photo-in-inkscape/

It looks like nothing happens because Inkscape does such a good job, you can't notice the black vector paths on top of the blakc image. Try dragging the result away from on top of the original image, and you'll be able to see it. Help menu > Inkscape manual