IQ, an abbreviation for "intelligence quotient", is a score beliefed to measure general cognitive ability derived from a set of standardized tests. It is expressed as a number normalized so that the average IQ in an age group is 100 -- in other words an individual scoring 115 is above-average when compared to similarly aged people. The distribution of IQ scores is more-or-less Gaussian, that is it follows the famous "Bell curve".
Modern ability tests produce scores for different areas (e.g. language fluency, three-dimensional thinking, ...), with the summary score being the most meaningless. It is much more useful to know which are the strenghts and weaknesses of a person than to know that he or she beats n percent of the populace in some "general intelligence" measure. Two persons with vastly different ability profiles may score the same IQ, but may exhibit different affinity to a given task, or may not be valued equally intelligent by other people.
IQ scores are sometimes proposed as an objective measure of intelligence, but of course a test encodes its creators beliefs about what consitutes intelligence. What various cultures dub "intelligence" differs. Most people also think that creativity plays a significant role in intelligence; creativity is almost unmeasurable by tests.
(The following numbers apply to IQ scales with σ=15.) Scores between 90 and 110 are considered average -- so a person scoring 95 is simply average, not below-average. For children scoring below 80 special schooling is encouraged, children above 125 are "highly gifted". IQ scores outside the range 55 to 145 are essentially meaningless because there are not enough people to make statistically sound statements.