An Acronym for Logical Volume Management.
A storage management system that allows viewing multiple disparate block devices as a single logical volume, thus allowing administrators to allocate space to FileSystems without regard for the underlying hardware on which it is actually stored, and with the ability to reallocate the space available on their storage devices to different Partitions on the fly as they see fit. The logical volume can stretch across different physical devices.
LVM was first introduced in the 2.4 series Linux Kernel and rewritten as LVM 2 for the 2.6 series. It is considered a critical feature for enterprise level computing, so RedHat are pushing it aggressively -- the default FedoraCore 3 install includes support for LVM 2.