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1.
Typically someone who is famous yet few can understand why. They are a perfect example of the "famous for being famous" paradox. Many of these people had a reason at one stage to be famous but memory of this has long since faded. In older days, the c-list was typically populated by people such as Jordan and Paris Hilton. Now with the reality television explosion, the list has grown.

C-list celebrities have difficult understand that they are really not that famous. This leads to amusing incidents where a c-list, on being told that they can't order the Pizza Hut buffet after 5pm will become angry and ask "Do you know who I am"?

A c-list doesn't need any kind of skills other than being a shameless self-publicist. Jade Goody is a good example. Although she quickly developed a reputation for being utterly thick during her stint on Big Brother, this did not stop her from carving out a career as a c-list.

Ultimately pointless. The modern day equivalent of the Roman idea of giving the people bread and circuses.
June: Have you seen the latest Hello magazine, Jordan is on the front page again. More revelations about that poor bastard of a kid she has.
Sarah: She's a c-list celebrity, she'll do anything to make sure her face is in the magazines, even if that means exploiting a child.
June: What exactly does Jordan do?
Sarah: No-one knows but she must be good at something. No-one can be this famous yet appear to have no useful abilities?
by thepreacher May 03, 2006
 
2.
People on this list are usually "famous for being famous" or reality show stars. To qualify to be called a "C-lister" you must be blissfully unaware that you aren't as famous as you claim to be or have received more fame than is proportional to your skills and talent.
Paris Hilton is a C-list Celebrity.
Anyone on the Disney Channel is a C-List Celebrity.
by GarBear The Man January 09, 2009