Historically it comes from something like this at
http://www.youtube.com/watch?v=cquvA_IpEsA
The mathematics of the gyroscope are the basis of quantum spin. It has only two directions of spin, left and right. Furthermore if we define magnetism with the right hand rule we get particles, with the left hand rule we get anti-particles, just like the real world.
Notice about half way through the video where the gyroscope starts to "precess", ie. rotate around an axis. It is important to note that there are two axis involved, first the axis of the gyroscope that most of the mass is rotating around. Second, the axis of gravitation, pointing straight up that the gyroscope is "precessing" around. The speed of the precessing is called the Larmor Frequency and is the basis of NMR imaging technology.
In an experiment called the http://web.mit.edu/8.13/www/JLExperiments/JLExp_18.pdf it can be shown that electrons go either up or down by fixed amounts in a magnetic field, not by a random amount that one would expect if the axis was fixed in a particular direction. The idea of precession, forces the "average" direction of the particle to align with the outside magnetic field and explains why the particle goes only up or down.
Some
animation videos here model precession under a variety of magnetic field strengths.
Partly why the short hand term 1/2 is used, is that some go down 1/2, some go up 1/2 hence the difference between the two is one.
For spin 1/2 particles you have 2 states: 1/2, -1/2 (a difference of 1)
For spin 1 particles you have 3 states: 1, 0, -1 (always a difference of 1)
For spin 3/2 particles you have 4 states: 3/2, 1/2, -1/2, -3/2 (always a difference of 1)