Use to call out someone to pick a fight, usually after the person on the receiving end of this statement causes some transgression or perceivable disrespect. Examples of things that would cause someone to say this include someone bumping into you, laughing at you, giving you a dirty look etc.. The implication is that if you're going around disrespecting people, you must be 'hood'/tough or looking for a fight.
It originates from "What's good?" which at the time it was coined was like another way of saying hello. It evolved into a hostile inflection to suggest to someone that something they did caused offense. This then evolved into "What's REALLY good?!" which then was substituted for what's really hood, basically meaning "if there's a problem we can solve this like they do in the hood." Likely the etymology of this phrase has something to do with the phrase "what's poppin'?"
Phrase started at WVU used when finding out certain information or seeing something occur that one thoroughly enjoys. Generally used instead of the older phrases "that's cool" or "that's awesome".