its origin comes from when playing a console game, where it means to push the joystick as far as possible in a certain direction
it has come to have a more literal meaning, as in having as much fun as possible
most people don't realize that the hardest jump on the invisible cap level for super mario 64 can easily be accomplished if you max the joy to the right
Originating from the Nintendo 64 game Wayne Gretsky's 3D Hockey '98 where it was a defensive move in which the player would get on his/her knees in order to block a shot, this word has come to mean an expression of joy or excitement.
see also: w00t