Loadrunner is the tool used for performance testing.
performance testing is to test how fast the 
application/system performs under load.Timing for both read 
and update transactions is gathered to check the system 
preforms functions within acceptable timeframe or 
not.Performance testing helps to identify what part of the 
system contributed for bad performance.Using the 
transaction response time graph we can analyze system 
performance.

The performance of the system/application can be improved 
by tuning either any of the database servers,network 
servers, web servers,application servers.

Hope it helps!!!!!

Performance testing:testing the stability and response time
of the application by applying the load..load may no of user
or amount of data.
 It is not done manually,it is automated by using load runner
.There are 4 types of performance testing:
1.load testing.
2.stress testing.
3.volume testing.
4.soak testing.