An interesting and readable article for laymen like me, and with good references:
http://serendip.brynmawr.edu/bb/neur...govern.html#12
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MK McGovern
Exercise has been touted to do everything from treat depression to improve memory, with the power to cure a host of problems while preventing even more. In particular, exercise leads to the release of certain neurotransmitters in the brain that alleviate pain, both physical and mental. Additionally, it is one of the few ways scientists have found to generate new neurons. Much of the research done in this area has focused on running, but all types of aerobic exercise provide benefits. Although the exact nature of these benefits is still being determined, enough research has been done to provide even skeptics with a motivation to take up exercise. Exercise exerts its effects on the brain through several mechanisms, including neurogenesis, mood enhancement, and endorphin release. This paper not only examines how these mechanisms improve cognitive functioning and elevate mood states, but also proposes potential directions for future research. Furthermore, it provides an explanation for exercise's generally non-habit forming nature, despite effects on the reward centers of the brain that mimic those of highly addictive drugs like morphine.

One of the most exciting changes that exercise causes is neurogenesis, or the creation of new neurons. The new neurons are created in the hippocampus, the center of learning and memory in the brain (1), however the exact mechanism behind this neurogenesis is still being explored. At a cellular level, it is possible that the mild stress generated by exercise stimulates an influx of calcium, which activates transcription factors in existing hippocampus neurons. The transcription factors initiate the expression of the BDNF (Brain-Derived Neurotrophic Factor) gene, creating BDNF proteins that act to promote neurogenesis (17). Thus the generation of BDNF is a protective response to stress, and BDNF acts not only to generate new neurons, but also to protect existing neurons and to promote synaptic plasticity (the efficiency of signal transmission across the synaptic cleft between neurons, generally considered the basis of learning and memory) (1, 3, 17). However, BDNF's effects are more than protective, they are reparative. For example, in a comparison between sedentary and active mice, scientists found that active mice regenerated more sciatic axons post-injury than sedentary mice. This effect was not observed when the active mice were injected with a neurotrophin-blocking agent, indicating that exercise stimulates injured neurons to regenerate axons via neurotrophin-signaling mechanisms (3).This reparative effect is particularly relevant to humans because the brain starts to lose nerve tissue beginning at age 30. Aerobic exercise reinforces neural connections by increasing the number of dendrite connections between neurons, creating a denser network, which is then better able to process and store information (4). This suggests possible preventative and therapeutic effects for diseases such as Alzheimer's and Parkinson's that progress via the loss of neurons. Indeed, a correlation between lifestyle and Alzheimer's has already been demonstrated (6). In addition, exercise has been shown to decrease the loss of dopamine-containing neurons in mice with Parkinson's (2).
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