In anime, fanservice stands for scenes which are not relevant to the overall plot at all, but merely are included to give the viewers what they presumably want to see. This generally includes things like panty shots, bouncing boobs, shower scenes, skirts which barely cover the crotch area, but can also be things like incredibly overexaggerated explosions, giant robots or supercute animals.
Do an image search for "Agent Aika" and you will see. That series basically is ONLY fanservice without a plot.
Jane: Sarah said she will be busy later as she is going to the gym.
Tom: She said that? I bet she went to fauxercise..she's only there to see the hunks.
Usually seen in reference to Japanese popculture. When someone (i.e. manga/anime character, music artist) flashes the general public and/or whenever two or more famous people engage in any action which could be perceived as sexual in nature just to stand out or please (excite, shock, etc.) their fans. Many bandmembers have been known to kiss, lick, rub, and hump against other bandmembers while performing or while in public. Usually, this is purely platonic, but not always.
Person #1: Did you see the ~ *insert band name here* performed at their last concert?
Person #2: Where the vocalist licked the bassist's neck, and later on the bassist humped the vocalist?
Person #1: Yeah, wasn't it great?!