The lump is something that could have many causes: inflamed lymph node, sebaceous cyst, lipoma. Because of her age and the description you gave me of what it feels like, I'm suspecting it's a lipoma or a sebaceous cyst, but I'm just guessing.
Here's more reading on lipomas and other cancers: http://www.thepetcenter.com/exa/lumps.html
On cysts: http://www.petplace.com/dogs/sebaceous-cysts-in-dogs/page1.aspx
On lymph nodes: http://www.peteducation.com/article.cfm?cls=2&cat=1614&articleid=319
The only way to positively identify what sort of lump or bump your dog has is, unfortunately, also through a trip to the vet. A fine needle biopsy (where the vet inserts a needle into one of the bumps and tries to aspirate/pull out material to look at under the microscope) will tell the vet, without question, what sort of problem your dog is having.
I hope this helps.
Lipomas are generally benign. And they are fatty tumors.
They're different simply because they're non-malignant...meaning they don't spread and don't cause any trouble.