I found the answer!
Turns out you're more right than me RTR. Did some digging around and the definitive answer is that MOST clay based cat litter uses bentonite clay- not laterite.
But there are SOME litters that use other various types of clays/substrate materials such as Fuller's Earth and laterite, so I just happened to stumble upon a couple brands that actually do use laterite (or at least that's what they said on the bags).
Here is a link to a litter producer that also says bentonite clays are the preferred clay, and gives a chemical analysis.
http://abone.turk.net/tulumen/Products&Packages.htm
It turns out Koi pond fishkeepers have been having the same "to use kitty litter or not" debate, lol.
Apparently in their niche, they use montmorillonite clay for ion exchange/to add nutrients etc and montmorillonite is basically the same as bentonite clays.
Here is where they ended up
http://www.koivet.com/catlitter.html
Here is a more complete run down of substrates including all these clays
http://www.google.ca/search?q=cache:qBC_1bL3gooC:home.infinet.net/teban/jamie.htm+bentonite+laterite+cat+litter&hl=en&ie=UTF-8
I also got out my old books and here is the textbook definition of laterite:
"Laterite is a soil formed in the tropics where chemical weathering is intense and leaching of soluble minerals is complete. Such soils are red......and are composed largely of aluminum hydroxides, iron oxides, and clay minerals; even quartz, a chemically stable mineral, is generally leached out.
Although laterites support lush vegetation, they are not very fertile. The native vegetation is sustained by nutrients derived mostly from the surface layer of organic matter, but little humus is present in the soil itself because bacterial action destroys it. When such soils are cleared of their native vegetation, the existing surface accumulations of organic matter is rapidly oxidized, and there is little to replace it. Consequently, when societies practicing slash and burn agriculture clear these soils, they can raise crops for only a few years at best. Then the soil is completely depleted of plant nutrients, the clay rich laterite bakes brick hard in the tropical sun, and the farmers move on to another area where the process is repeated."
It goes on to say that Bauxite (aluminum ore), forms with laterite who's parent material was rich in aluminum can be found in Arkansas, Alabama and Georgia, which had tropical climates about 50 million years ago, but is mainly imported from currently tropical climates.
So there you have it. MOST clay cat litter is bentonite clay, not laterite. But both have desirable properties.
Back to work now.
I do recall that there were very specific criteria/specifications to classing various things like loam and even sand and gravel, which did not always match up with the common terms used in say landscaping etc.