Origin unknown, but this phrase was recently popularised by Dale Howard from Big Brother 9 in the UK.
It describes someone who makes themselves look stupid when they say certain things. Hence they look stupid(as you would if you talked with your dick hanging out).
Can also often mean that someone has double standards and possibly quite hypocritical behaviour
"Rex is probably taking notes on me anyway, talking with his fucking dick out all the time. I'll be doing something and he'll be doing the same thing all the time so he can't say anything. He's just talking with his dick out *cue Jennifer pointing to Rex across the garden who Dale hasn't spotted yet*
1: Dude, did you notice that he talks with his hands a lot?
2: Did you see how long his nails are? He is talking with his nails! I am afraid I might get cut.
A man is teasing and turning on women by wearing tight spandex shorts or tight jeans showing the outline of his penis, and at the same time conversing in risque, sexy conversation with women, knowing that they are checking out the outline of his dick and getting turned on and horny for some cock.
All Bad Ass Wally does all day his hang out on the corner wearing his spandex shorts and engaging in sex talk with all the women who pass by to check out his cock showing through his shorts. Bad ASs Wally loves to spend all day Talking Shit with a Foot Long Dick.
When you have to pee in a movie but don’t want to miss anything, and must do the following mental equation: will the amount I have to pee cause enough discomfort to diminish my attention capacity for the remainder of the movie to an extent which is greater than the amount of the movie I would miss by making a mad dash to the restroom.
I saw Satantango last night, wonderful film but by the 5th hour I had to start doing pee calculus.
Short-hand for the word floccinaucinihilipilification, meaning the estimation of something as valueless (encountered mainly as an example of one of the longest words in the English language).