To hit someone with a fish, usually to the face. In real life(IRL), this is considered fairly extreme in most groups and not terribly common. In
internet chat, especially IRC, it's a very common way to show mild disapproval/discust/boredom. It was included as a (the only?) default point-and-click action in mIRC (a popular Windows IRC client) further increasing it's popularity. The default action (changeable, randomizable, etc) when fish slap is selected is currently "X slaps Y around a bit with a large trout".
When discussing the practice, many people tend to bring up Monty Python's
Fish Slapping Dance, a popular sketch from Monty Pythons's Flying Circus. Though certainly not the only fish slap in the media, it's most likely
one of the most famous.