Contrary to popular belief, this stands for Too Much Information, but the meaning is not the same. It actually means 'I cannot handle what you just told me, and it took me off guard, because I am too {prude/insecure/jealous/lame/dumb/close-minded} to be ok with you saying it.' There are actual instances of TMI that occur, but this definition rarely lies in the eye of the beholder, because usually that person just 'Can't handle the truth!!'
Guy 1: I slept with Chick 2 the other night.
Chick 1: OMG TMI!! I can't believe you told me that.
Guy 1: That's not TMI...you're just jealous or surprised because you didn't think I could score with Chick 2.
Chick 1: Nu uh, you just shouldn't share things like that.
Guy 1: You just told me you slept with Guy 2 the other day.
Chick 1: ...that's different...cause....
Guy 1: Case in point.
Self explanatory; can be used to throw people off guard in conversations and will bring instant humour/worry at the thought of you wanting to touch their intestine.