A combination of the term homo (short for homosexual) and the internet slang "lol" (laughing out load). Discovered on a cyber forum name REPOST by the administrator of Ilechoo.com by accident on the 6th of July 2007.
Not necessarily used to describe someones sexual orientation. Often used as an insult in a friendly context without the purpose of actually insulting the person objected to the word. Can also be used as an adjective to describe a certain object, individual or situation.
"But, srsly, A Clockwork Gay was so homolol."
"Maybe my homolol accent has changed."
"Some fucking homolol decided that he was gonna mess with us."
"It makes me sad homolol."
"I wanna spacedock you homolol."