This is my 2nd year in showmanship but my pony has been doing this since 3 months old, what can I do to practice?
The best way to practice, once the horse understands the cues for each component maneuver (walk, trot, halt, back up, pivot, and stand square; pull turn later) is to make those movements part of daily interaction. Every time you're taking your mare from the stall to the pasture, lead her like you're being judged, square her up at each halt, make turns into crisp pivots. That's the best way to really get the ideas ingrained, for her and for you. It's a lot easier to go in the ring and let habit take over than to worry about what the horse will remember or understand in a strange environment.
Whats the difference between showmanship and halter?
Very simply, showmanship judges the human, and halter judges the horse. The difference is similar to that between pleasure (halter) and equitation (showmanship). In showmanship, the horse doesn't need perfect conformation or gaits to be successful, as long as she's well conditioned, perfectly clean and wearing well fitting and appropriate tack, sound, and shown to her best advantage. Manners are important, because it's hard to show a misbehaving animal to the best advantage. The horse is essentially a prop to demonstrate your ability to condition, groom, and handle a horse correctly.
Conversely, halter judges the horse according to his/her breed standard (or, in the case of open/grade halter divisions, general rules of correct conformation and gait). Type-iness matters, and it is the job of the exhibitor to present the horse as an ideal representative of the breed or type. Halter allows a lot more touching of the horse by the exhibitor, even to the point of hand-squaring feet in some cases. The horse is judged on conformation, way of going in the walk and trot, etc. Having "ring presence" is always a plus. Usually halter doesn't utilize such an intricate pattern as showmanship - halter entries usually enter at a walk, pass the judge at a trot, and join the lineup.
If your about to run the judge over and don't have the room to turn away from you, is there any other choice than to turn into yourself?
Rule #1 of showing: do not run over the judge, whatever it takes.
Rule #2 of showing: set yourself up so that you don't have to do something drastic to avoid a collision.
As I'm envisioning the scenario you gave, pulling the horse to you would swing her hindquarters toward the judge - not safe at all. Your best bet is to practice approaching the judge at the walk and trot. If you don't have a willing friend to "play judge" for you, stick a broom in a bucket full of sand/dirt to be a "stunt judge." Practice walking and trotting straight lines to the judge, stopping about 3 feet away from her. Don't start asking to stop 3 feet away - know your horse and how long it will take her to react to your cue. Your horse should be lined up with the judge, not you ~ so, when you stop, your mare's nose will be ~3 feet from touching the judge in the center of her chest, and you will be slightly off to the side, prepared to set up for inspection. Practice makes perfect. 3 feet gives you enough room; you can maneuver the horse without crowding, there's room to cross over, and you won't scare the judge too badly.
Does it matter if your horse isn't squared up while waiting for your turn?
If the horse's feet aren't moving, they need to be square while in the ring. She should be standing square, and you should be at attention, crossing over as the judge moves around the ring, even if you aren't being directly inspected. The one caveat that I personally have is if its a jillion degrees, beating sun, there are 20 horses in the ring with me, and we've been standing there for an hour and a half. I'll allow the horse to rest a hind leg in the lineup then, as long as he's basically square. Otherwise, until the announcer says some variation of "you may relax," stay at attention and squared up.
What if your horse moves around while waiting for your turn as your in the arena?
Again, practice at home can help, but a lot of horses do get fidgety, especially in the lineup of a big class. Best thing is to calm them as best as you can without touching them (softly talking is ok in the lineup, just be unobtrusive). If she fidgets to the point that she becomes too crooked to straighten, pull her forward, pivot her, and realign her, asking her again to stand. There isn't much you can do to discipline it in the ring - if she's antsy, just do your best to keep fixing her and keep smiling.
Whats a reasonable spacing between two horses?
There will probably be a ring steward there to direct you where to stand in the lineup. Most head-tail lineups, though, I use the trail riding rule of thumb: at least 1 horse length between entries.
Anything crucial to remember (besides the course)?
Some showmanship judges will ask a question; I've had questions as simple as "what's your pony's name" or as in-depth as "what size shoe does your pony wear" or "is an English horse required to stand squarely in showmanship." You'll be judged on your answer. The question won't be anything that you won't already know if you're familiar with the rules of the class and the care that your horse receives.
One more thing is to acknowledge the judge. Before you start your pattern, the judge will nod to you when she's ready for you to start. Nod back as you begin. The judge will probably nod and say thank you when you are dismissed back to the lineup - nod back and smile a little bigger. As you return to the lineup after inspection, glance back over your shoulder at the judge. There's some disagreement on exact protocol here: some people say one glance is enough, others say three looks is appropriate. Also, use those glances as an opportunity to check the straightness of your line.
Other than that, keep smiling, and enjoy yourself and your horse! Something that might help you is to set a goal for yourself: not to get a certain placing, but something like standing quietly in the lineup, or exhibiting those smooth transitions you've worked on at home. That will help you feel like a winner, no matter what ribbon you get.
Sorry for the novel - I know it's a lot of info...