It's the acronym for: Rolling On The Floor Laughing My Ass Off And Scaring The Cat. It expresses extreme amusement for a funny situation; it is also used by nerd people in order to conquer the weak-minded noobs of the web.
Noob: "Heya m8!"
Noob: "C'mon, wazzup?"
Nerd: "Stop bothering me and lemme play WoW in peace"
Noob: "Wottaffukka is that?"
Nerd: "Stfu, noob! Rtfm! I'm gunna enslave you, rotflmaoastc!"
Noob: "Yes, master?"