A distro is the type of Linux you are using. For example, Ubuntu, Fedora Core 7, Gentoo, PCLinuxOS, Debian are all Distro's. Basically means distribution. :)
If you didn't understand that here it is straight from some site I googled,
A Linux distribution or GNU/Linux distribution (or a distro) is a Unix-like operating system comprising software components such as the Linux kernel, the GNU toolchain, and assorted free and open source software. Some proprietary software is found in certain distributions and is not free software. A Linux Distribution — or distro, en parlante — is created by individuals, groups and organizations from around the world
-Nitro