Brain shifts from glucose to lactate fuel source during exercise.

I had that thought as well. I do know that some of the people in the medical field whom I have talked to say that exercise tends to shift the brain in to more predominant Alpha wave patterns which correlates to creative thought. That explains why stepping away from the computer and taking a walk can be very helpful for solving problems.

Maybe, but check this out too: http://www.physorg.com/news142012820.html

It's especially interesting in that when muscles work really hard they make lactic acid - which is then used by the brain when it is working hard.

No, I think the paper just says that the brain can get by with lactic acid, not that it works better with it.

I wonder if that is related to the beneficial effects of exercise on mood.

I think "runner's high" is endorphins, but I'm wondering how the lactate interacts with the endorphins as well.

incidentally, what exactly is lactate? ...milk bits?

I'm going to guess this: http://en.wikipedia.org/wiki/Lactic_acid

Technically speaking, milk bits.