So I've heard that phrase a lot on these forums but what is min/maxing anyways?

I'm not sure if they've talked about your characters progress.. as in maxing would be using enchanting and smithing and stuff while "min" would be only using the base skills..

But honestly, no idea.

it is trying to make the best possible character in a game

Minimizing the weak aspects and maximizing the strong aspects? As in not wasting perks on lockpick?

Min/Maxing is just that: minimize the negatives, maximize the positives

Ironically, this is quite a negative term.

Min/Maxing is about maximizing your character in every way possible: amount of cash, armor rating, weapon attack power, skill level, etc
And minimizing the negative impacts like stealing back the money you paid to trainers, powerlevel smithing with iron dagger instead of armor

Also consists of picking items with best value/effort ratio, for example, nobody will take any lockpicking perks when min/maxing, because it useless like that. Min/Maxing usually involves getting the best armor/weapon, beyond that I don't really know, as the point is to reach the maximum limit

It's one of several things, but at it's heart, it's boosting the skills/stats you use while (trying) to not use the skills/stats you don't. If done correctly, you'll have made a character that will steamroll everything in their path.

Morrowind and Oblivion had this issue due to their leveling system; a Min/Maxer would attempt to boost the stats best for their toons (like Strength and Endurance for warriors) while avoiding a boost that aren't good (like, say, personality.) THis was practically a requirement for Oblivion (combined with effecient levelling) due to how badly they implemented the whole leveled enemies bit.

Not sure if Skyrim's system has circumvented Min/Maxing, or if Min/Maxing is the only way to go with it...

pretty much

It's the idea of examining the system behind the game and then crafting a character purely in terms of superior mathematics to prosper in that system. It's a common practice that tends to be discouraged from a role-playing perspective, with the common suggestion that, "You'll derive more satisfaction/enjoyment from the game if you do what your character wants to do rather than doing what's best purely from an outside puppet-master type perspective."

In a nutshell.

Ah. Well I guess I'm a roleplaying Min/Max person considering I use Illusion (not invisibility for roleplaying reasons), Sneak, and Enchanting...because they fit with my character.

Depends. A Min/Maxer would cast low-level illusion spells consistantly (i.e. all the time, even when not needed,) enchant/dechant everything they can, and (almost) always sneak around so those skills will be boosted the fastest. If you do these, you are a Min/Maxer, if not... you're playing your character intellegently.

Creating a character with the Maximum Stats while playing a Minimum amount of the game.

Basically, it is where you take a character to a non game impacting area or do a non game impacting activity in order to spam the skills needed to increase either than skill or the character level. MMO Players do this because those games are all about the levels. TES games are all about the world and the story and we all know that levels are really meaningless, they are just a way to keep track of any skill progress but do not have a large impact on the game, other than Spawn Thresholds and a few quests that get unlocked at a certain (relatively low) character level.