An interjection used to counteract a statement or act that might be interpreted as expressing homosexual desires.
As of late, the word has humorously evolved to counter a statement that has even the slightest tinge of homosexuality to it.
Some of my favorites from the internet:
"...commanding the dirty funked up wah-wah guitar, lush arrangements, heartstopping strings, wailing double-tracked backing vocals and trippy backwards fx to do backflips and weave their way in and out of macked-out horns and throbbing bass grooves (no homo!) while crisp snares and reverberating bongos underline the whole experience."
And even funnier (to me):
"A quick search on froogle (no homo) pulls up 160 Gigs of external harddrive (again, no homo) for as cheap as $106."