Underexpose and then overexpose the stated number of stops. OR, overexpose and underexpose in the range of the stated number of stops. It's a little ambiguous, I think.
If someone told me to bracket by a stop, I would shoot one photo underexposed by one stop, one photo "properly" exposed, and one photo overexposed by one stop.
If someone told me to "bracket 5 f-stops," I'd probably just shoot everything between -5 e.v. and +5 e.v. in 1/2 stop increments. 
Most SLRs can automatically "bracket" by exposure. For example, you set the camera to bracket by 1/2 stop, and it will take three successive photos, with corresponding exposure values. Bracketing becomes even more complicated nowadays because the newest cameras can do white-balance bracketing (by color temperature) and ISO bracketing (shooting on either side of what you have set the camera for).