Great Question....we have debated this question on this forum and I think
what is a puppymill has a different answer for everyone. Here is a link to a thread where it was discussed:
http://www.yorkietalk.com/forums/sho...ight=Puppymill
Here is a link to a website that tries to answer the question:
http://www.canismajor.com/dog/puppymil.html
And to answer the person who asked if they are illegal... the short answer is no...they are legal if they follow the laws set forth by the USDA. It is perfectly legal in our country to mass produce dogs for profit as long as they are not abused or mistreated in any way. The difficulty comes when different people have different ideas about what "abuse and mistreatment" are. Any abuse or neglect or mistreatment is cruelty to animals and is illegal.
AFTER the Puppy Haven thread on here I had the chance to speak to Wallace Haven, the owner and I am convinced that he is not a "puppymill". This is just my opinion. Yes, he is a mass breeder or several different breeds but the dogs are treated very well and given the very best food and veterinarian care.
When I think
PUPPYMILL 
I think of the pictures you see on the anti-puppymill websites like Prisoners of Greed, not responsible and respectable, well educated business people who have degrees in Animal Husbandry and take care of the pups and their breeding stock as any good animal farmer does.
Little Peanut is tooo cute!!!! Looks like my Hefner as a baby...little tongue sticking out and everything!!