1. Is a business that makes money. 2. See point 1. above
Everything else is considered either art (as in artist) or hobby.
Examples of non-startups:
1. A iPhone developer with 1 app, no revenue 2. A web development shop with no customers - or no significant growth potential (that's a hobby). Especially if you work for someone else. 3. You make no money - this is a "non-profit organization" or "charity" - or a "research institute". You often have to do other jobs on the side to eat, live.
Example of a startup:
37 signals build software for internal purposes (eg: Basecamp). This would initially lead you to believe this is a not a startup, but then the started charging for it on a mass level, providing good for other people, etc. This is a startup. Once you mature the revenue, you are no longer a startup.
A pillow store is none of the above things so it's most probably not considered a startup. A game development shop can be a startup if it meets some or all of these things. Web development firms can be startups when they make web applications for the public or businesses to use (like 37signals).
Just my 2 cents.