* Laying is the present participle of the verb "to lay," meaning to place something down. For example: "She is laying the table."
* Lying is the present participle of the verb "to lie," meaning to recline or to tell a falsehood. For example: "He is lying on the couch."
So, if you're talking about placing something down, it's "laying". If you're talking about reclining or telling a falsehood, it's "lying".