1337/leet/l33t means "elite" and was a term to show that you were computer savvy or in on internet culture. 1337 H4X∅R would mean, "Elite hacker." According to Wikipedia, it originated on early BBS message boards where users could have "elite" status, giving access to special chatrooms, but I'd say most people encountered it later, in the context of gaming, where it could be used to brag about winning through hacking a game or using exploits, or just to brag about being good at it.