spinning.....?

I think of spinning as simply turning the pedals. However, there are exercise classes at the health club that I belong to that are called spinning classes, usually 45 minutes to an hour in length.

It's about pedalling technique. Spinning is about pedalling so that you're powering smoothly through the full revolution of the pedals, not just on the down part. This can't be done without having your shoe clipped to the pedal.
Another part of it is in gear selection. You want to gear down so that you're not mashing a tall gear so you can get a smooth circular action.
The end result is you can go faster.

I've seen a lot of shoes that said they were cycling/spin shoes, and I had a friend the other day say something about how small my pedals were, so i picked up my shoe to show her how they worked, and she said "i know how they work, my mom used to spin..." so just when people make refrences like those, is that probably the exercise thing?

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There are actually two definitions. You have to figure out which applies by the context of the discussion.

Commuter Steve did a good job of providing one.

The other is a (usually group) resistance trainer class that uses a stationary bike which has a heavy flywheel and uses a variety of interval exercises. The quality of the class, of course, depends on the instructor. Like Klenex, technically to be called "Spinning" the instructor has to be trained by the staff of a guy who refers to himself as "Johnny G".