The first answer covers the information regarding conditioning as it appears in BNW. I would just like to add that it is not limited to BNW, but goes on everywhere. We are all "conditioned" by our upbringing, tending to repeat behaviors that produce favorable results and to avoid behaviors that produce negative results. In our society these experiences are somewhat "random" --- in BNW they are much more focused and focused by the society to produce a culturally desireable result. No one escapes conditioning in one form or another.
If you are interested in seeing another kind of conditioning, you might want to look into B. F. Skinner. His Utopian novel, "Walden II" shows how conditioning can work for society's betterment (in his vision). His "Beyond Freedom and Dignity" provides a not.too.technical introduction to the concept behavior modification. They're both interesting reading and will shed some light on the conditioning in BNW.
Conditioned refers specifically to people living in BNW. The World controller in BNW uses hypnopaedia, genetic manipulation, and other societal controls to "condition" the inhabitants so that they have social stability and everyone has their designated caste and fulfills their designated roles. It begins when the embyo travels down the conveyor belt in the Department of Hateries and Conditioning. The embryo is subjected to alcohol contamination if it's to be a lower class individual or given extra oxygen if it's to be an alpha class individual. When the infants are growing they are conditioned again through the use of "sleep-teaching" or hypnopaedia. Here, the individuals are subliminally taught while sleeping to hate books, flowers, nature and love things that the BNW encourages. Lenina's mindless rhyming off of hypnopaedic slogans in chapter three is proof of this success. Conditioning occurs in the society as well through the use of soma to dull the wits and carry one off on a "soma-vacation." Conditioning is an integral tool in social stability and societal control.