First of all, this is not something special to "the basic New Keynesian Model". It is a commonly used technique when modeling an economy with competitive environment.
In your case, the author wrote that there is a continuum of differentiated goods represented by the interval [0,1] and each firm is producing one of the goods. You can imagine that there are uncountably many different kinds of good in the market. As a result, the size of each firm is negligible (just a point on the [0,1] interval) compared to the entire economy. Each firm indexed by $i$ solves its individual profit maximization problem to obtain its labor demand $N(i)$. Then, the aggregate labor demand is simply the "sum". In this case, the sum is replaced by the integral because the variety of different firms is the whole unit interval.