And my response is usually something somewhat descriptive, incorporating words like "blogs" or "Facebook" if I want them to follow what I'm saying. But when pressed to make it relevant for someone - it usually takes a longer exposition.
I'm assuming that since you're a reader, you have at least a few minutes to share with me. Given that you do, here's a really great slideshow from Marta Kagan, who posted it on Slideshare. Warning: there are modestly censored obscenities.
If you think this is a great presentation (and given that some 27,000 people have viewed it, I think it's safe to assume it is), you might consider voting for it in Slideshare's World's Best Presentation contest.
World's Best Presentation Contest
How about you. How do you succinctly explain social media to the unwashed masses?