Function notation in real numbers refers to mappings from one set to another, specifically from ℝ^n to ℝ^m. When R is raised to the power of 2, it indicates the Cartesian product R x R, representing a two-dimensional space. The discussion seeks clarification on the implications of R raised to the power of n, which denotes the product of n copies of R, resulting in an n-dimensional space. This concept is fundamental in understanding higher-dimensional functions and their applications. Overall, the conversation emphasizes the importance of Cartesian products in defining multi-dimensional mappings.