In the singular usage it more generally refers to a person holding French citizenship. More specifically, to a Frenchman holding an opinion that is deemed (by the listener) as unsupportive - especially regarding foreign policy or military matters.
It refers to the supposed cultural habits of Frenchmen - cheese eating and surrendering when any slight agressive action is taken towards them or their country. It is considered perjorative in any sense.
No war in Iraq? What are they thinking, those damn Cheese eating surrendermonkeys?