It is a nipple that is disfigured in some way that makes it humerous enough to laugh at. These have been known to get many people slapped across the face.
Jarrod: "Dude Kristen is trollin' on you on facebook, what the hell did you do bro?!"
David: "Dammit, I laughed at her niplol"
Jarrod: "Nice one derp."
David: "Dammit, I laughed at her niplol"
Jarrod: "Nice one derp."
by Phantom-Kirby October 2, 2011