Hello I'm about to start using the p90x and I'm looking over the fat shredder menu and was wondering when it says protein powder is that meaning to drink a protein shake or what because that's got me confused of what it is meaning to do?
There's a more complete answer you can read up on, if you're interested.
A "protein shake" is exactly what you guessed: protein powder (typically whey) shaken up with liquid (typically water, sometimes milk). It's a quick, cheap, and convenient source of protein. Most people simply don't eat enough protein and to get the levels required for high intensity strength training it tends to be hard to beat.
"Real food" that fits your macronutrient and calorie goals is always going to be superior in the long run: your body needs more than a whey shake. But if you're ~50 grams short for the day a shake in the morning and one at night can be a convenient and easy way to solve the problem.