The word is used to describe a homoerotic or homoromantic subtext between two characters, generally on a television show. Where one sees HoYay is, of course, extremely subjective, though in some cases it can be canon, not just subtext, as in the episode of 'Angel' wherein Spike says 'Angel and I were never intimate... apart from that one time.'
'Those two totally bring the HoYay.'
The female version of Ho Yay is Les Yay.
Tom: Um, what's up...Joe? *blush*
Guy 1: Look at those two guys. There's some Ho Yay goin' on between them.