Coño literally means "cunt/pussy" but it is very rarely used with such meaning outside of Spain. Its use is mostly associated with Spanish, Cuban, Dominican, and Puerto Rican talk as an accentuated expression equivalent to "damn", "whao", or "hell". It is not formal but not considered much vulgar either. Some parts of Latin America almost never (if ever) use this term. It is almost never heard in Mexico or cetral Colombia for example. In exchange the most employed slang word for "pussy" through Latin America is "chocha".
Cubans in particular may also abbreviate it to "ñoo" when used alone, equivalent to USA's slang "daaaium" or "deeeeim".
"Concho" is a distorted softer version as "darn it".
Coño, eso esta bueno.
(Damn, that is good)
(Study, damn it...)
Que coño es eso.
(What the hell is that)