A 'n00b' is a player that is new to a game, website forum or software application.
It is a word most commonly used now by testicularly challenged 13 year old gamers, it was originaly derived from 'newbies' or 'newbs'. Later becoming 'n00b' in the fields of counterstrike 1.6 and the like.
Although now considered a word to be used by internet newbies themselves, originaly it was neither insulting or derogatry. Instead it was used to inform others that You, or another person, were relatively inexperienced in a certain area.
*on seeing a guy killing team member, or staring at a box for 10 minutes straight*
Sam: That guy is a f***ing n00b.
Rick: Yeah, wtf is his name anyway? I cant read it with all those retarded numbers.