Short for "elite", sometimes typed as l33t. Often used to describe something as being particularly awesome or cool. Legend has it that it originated from the way Hackers used to speak. Today, using this kind of lingo is generally looked down upon when used seriously.
"Did you see that new Battlefield 2 demo? That was pretty 1337."
This word has a myriad of variations with different combinations of letters and numbers, such as 31337 and l33t.
How to speak 1337
To 'speak' 1337 often involves replacing letters in a word with numbers, dashes and periods. Such as, 4PP|_3 (Apple), the 4 meaning A, |_ meaning L and 3 meaning E.