It is a term used in place of a name when the name is not remembered. "I saw What's-His-Face the other day... Ah yes, I remember, his name was Johnny." It is sometimes also used to express disdain or disinterest in someone. "I'm glad you broke up with What's-His-Face, he was no good."

Ghosty and Jamys answered the question; I just want to add that "what's-his-face" is considered a slangy, unsophisticated term. Slightly more couth is "what's-his-name." Even better is "the person whose name has slipped my mind/I forgot/I can't remember." But then again, most people will stick to "what's-his-name."

What's-his-face // What's-his-name = That person whose name I can't remember. I saw what's-his-face in the pub. = I saw 'that person whose name I can't remember' in the pub.