What does PermGen actually stand for?

PermGen is used by the JVM to hold loaded classes. You can increase it using:

-XX:MaxPermSize=384m

if you're using the Sun JVM or OpenJDK.

So if you get an OutOfMemoryException: PermGen you need to either make PermGen bigger or you might be having class loader problems.

Permanent Generation. Details are of course implementation specific.

Briefly, it contains the Java objects associated with classes and interned strings. In Sun's client implementation with sharing on, classes.jsa is memory mapped to form the initial data, with about half read-only and half copy-on-write.

Java objects that are merely old are kept in the Tenured Generation.