Your assumption about simulating a live fish is fairly spot on, except that the aim is simulate a wounded or injured fish. There are many ways of fishing for predators (pike, zander, etc.) with deadbait, such as using a float, ledgering (where you basically cast out, let the bait and rig sink and then wait for something to bite) and wobbling. With wobbling (similar to spinning and trolling), you "twitch" the line while reeling in to make pedators think there's a dying fish for the taking.

The right type of deadbait has to be used for wobbling, because constantly casting out and reeling in can take its toll - if you use something too delicate, you'll just have a few scraps of your bait left after a couple of casts (unfortunately I know from experience).

Incidentally, a great rig for wobbling (used in the UK) is the Drachkovitch rig (link in piazza's post), which was devised by a leading French predator angler for "mort manié".

Note that this answer is specifically for UK usage. I've no idea what term would be used in the US.

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Note added at 17 hrs (2012-03-31 08:06:19 GMT)
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That should read "...the aim is TO simulate..."

I prefer the term "wobbling", though "spinning" would be understood. Either way, you'd need to include "deadbait", because spinning is typically associated with the use of a lure.

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Note added at 17 hrs (2012-03-31 08:12:15 GMT)
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I should have added that the difference between the deadbait fishing methods is static vs. dynamic. With ledgering and float fishing (static), the bait just sits there and you have to hope that a fish will swim by. Wobbling, like "mort manié", is a dynamic method, since you're making the bait move (or at least trying to).