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A portmanteau of the two words, lesbian and lizard, meaning basically someone who is female and is attracted to women. The "lizard" doesn't have much to do with the meaning, but lets be honest... it just sounds good.
Coined in early April of 2007, it came to be used as either an insult to the same effect as gay or a term of endearment if so chosen, depending entirely on the tone with which it was delivered.

NB: meant in a non homophobic way.
Marianne: Why are you so gay?
Spenser: Why are you such a lezzard?
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