Person 2: What a fuckin' douche nozzle!
2) A male who acts and looks like an utter jackass. Someone who transcends common insults to the point that simply calling him a "jackass" or "douchebag" will no longer do. Much more offensive than simply calling someone a douchebag.
2) "Can you believe that Douche Nozzle? He's walking around the party, talking to fat chicks and searching for an 'Insert Here' sign".
3) Oliver from Spring Break.
The phrase originated on the nationally syndicated radio show Loveline from C list celebrity Adam Corolla (also on comedy central, various shows)
note: please use the word douchenozzle sparingly because otherwise you will be a douchenozzle and the rest of us will have to create a new word to define those who are more of a douche than a douche and a douchenozzle.