Life in habitats (includes the terms space colonies, settlements or stations) floating in space has been visualized by scientists and science fiction for a good part of the 20th Century.
Some of these space structures were envisioned as being built entirely out of manmade materials. Others were carved out of asteroids. In 1963 Dandridge Cole suggested hollowing out an ellipsoidal asteroid about 30 km long, rotating it about the major axis to simulate gravity, reflecting sunlight inside with mirrors, and creating on the inner shell a pastoral setting as a permanent habitat for a colony.
Actual Space Station
Other than the Soviet/Russian Space Station Mir, which fell to earth in a planned de-orbit in 2001, the International Space Station (ISS) is the only significant (weighing more than 100 metric tons) space habitat ever constructed. Neither it nor its precursors were designed to generate artificial gravity by rotation.
The International Space Station now orbiting the earth began construction in 1998. Station assembly completion slated for 2012, far beyond the originally contemplated 2004 completion date. The estimated cost by the ESA is €100 billion for the entire station over 30 years - far beyond original projections. Probably most important, its construction resulted in the relinquishing of alternative paths (moonbase, etc.) into space that those billions could have financed. The ISS is funded until 2020, and may operate until 2028.