It's typed when someone thinks that s/he can be funny, and since you press shift and 1 when you want to make a ! symbol, if you forget to press the shift, a nice 1 will appear. But there's no point in typing the whole "one" word, however.
Someone that wants to be funny: LOL !1!1one!
The one who will pwn the guy who wants to be funny: Wtfh does !1!1one! mean?
The first guy: Look at the definiton -_-