My Mother was German and came over here and met my Father and then had me in 1962. I found out this year that they were never legally married. Does this allow me through my Mom to keep and/or be recognized as a German Citizen?

Probably, contact the German embassy/consulate.

http://www.germany.info/Vertretung/usa/en/01__Embassy/Washington/04/__Legal.html

Was the citizenship of your mother at the time of your birth? What is yours?

My Mother was a German Russian who returned to Germany after getting kicked out of Russia by Stalin during WWII. They returned to in 1945 to Germany and lived there for 8 years before immigrating here to America in 1952 I was born in the U.S. in 1962.

Again, what was her citizenship @ the time of your birth. Was she a permanent resident, or was she a naturalized US citizen? If she indeed became a US citizen before your birth, she renounced her German citizenship, and you have no ancestral claim to German Citizenship.

She was a German Citizen, she move here and married my dad, we all thought she became naturalized due to marrying my dad, but come to find out there were never legally married.

Marriage to a US citizen doesn't automatically confer US citizenship. You would need to know for certain the citizenship of your mother at the time of your birth for me to give you an answer with any degree of certainty. Generally speaking though, she would have applied for and received a green card as the foreign spouse of a US citizen and would have been eligible to apply for naturalization after three years.

Out of curiosity, why weren't your parents legally married?

I am 49 and just found this out 2 weeks ago when I ordered a copy of their divorce degree. He was already married when he married my Mom, and not only that he married her under an alias. Don't ask me what he was thinking... If he were still alive today, he would be getting a tongue lashing from me. :) I do remember my Dad once telling me that my Mom studied for the exam, but I am sure he said that she either took the test, but never was sworn in, but the impression I got was it never was followed through. I did request her immigration records from the UCIS so we'll see what they say.

That is you best bet. Your claim to citizenship would hinge on if your mother was naturalized. Germany generally does not allow dual citizenship unless it was obtained at birth, ie: if she was naturalized in the US before your birth, your ancestral claim to germany would no longer be there. Please let us know what you find out.