The term "lifehack" is derived (if a term still in its infancy needs derivation) from the technical hacks that programmers and other geeks have set up for themselves to make their lives easier. This usually means methods of organizing data, little utilities to synchronize files, one-off scripts that automate daily tasks, etc. These things are all personal, often suited entirely to the situation and not shared with anyone. The term surfaced when there was a suggestion to share these and see if others could benefit from these "life hacks".
The term, being more generic than the original derivation, was expanded to a broader definition as the meme spread. Today, lifehacks are basically anything that is a solution to an everyday problem, frustration, etc. As a result, we're seeing the term used to describe solutions to getting organized, losing weight, public speaking, doing your professional job better, time management, etc. As such, the current useage probably more accurately reflects the term itself.
"Life" is a generic term we all use to describe pretty much everything other than the thing we're primarily paid for or really dedicated to. We often ask people how work and life are going and mean pretty much everything in that person's "life".
The terms "hack", "hacking" and "hacker" have a long (and troubled) history in the computing and geek communities, particularly within the open source crowds. Like many other truly useful terms, outright definitions are difficult because "hack" is just the right word for the concepts involved. However, according to the Jargon File (typically the authority on the term), the quickest summary is "an appropriate application of ingenuity" to a problem.
Lifehacks do tend to emerge mostly on the fat part of the bell curve as far as the way the lifehacker views the problem. What that means is that a good lifehack is really useful solution to a problem for lots of people, but not for people who experience the problem at a level other than the "normal" level of the problem. For people who view the problem as not being a problem at all, the lifehack is overkill. For those who deal with the problem on a large scale or professional level, the hack is inadequate. However, for the rest in the middle (the majority of us), the hack hits the sweet spot. It's just enough to solve the problem without being the industrial/professional/enterprise solution that the pro's need. It's going to be obvious to the professional and overkill to the outsider.
This is exemplified in the reaction to my grocery lifehack article. For many, they just don't cook enough, it was WAY too much work (though the goal of that technique is specifically to do as little work as possible as with many lifehacks). Still others thought that it needed a full-blown software solution or ways to even more elaborately plan out meals and found my solution to be inadequate.
Spam filtering is another prime example. Though dwindling, there is a group who gets so few emails that spam isn't a problem. Their email is just used for work, never shared outside and the 1 spam message they get in a week is easily deleted. For them, ANY effort spent on filtering it would be overkill. For some of us (myself included), the thousands of messages per day that go though our email include hundreds or thousands of spam messages alone preclude many of the simple email lifehacks. More industrial solutions are required for that end of the spectrum. However, for the vast majority in between, there are quite a few decent hacks that will eliminate most of the spam problem.
So, a good lifehack solves a problem in your life that is in need of an ingenious solution, but cheaper and quicker than the "right" solution, while simultaneously giving the extra pleasure of having solved the problem uniquely.
Right now, the term is primarily being used by geeks (where the term originated) and in the 20-something "iPod crowd" who tends to be active in blogging and have technology fairly well integrated into their lives. However, given the broad appeal of these types of solutions, I expect the demographics of people interested in lifehacking to grow considerably in the near future. Many examples of lifehacks can be found on lifehack.org (I'm a regular contributor over there), lifehacker.com and 43Folders.com.
This is just one person's take on it after watching the trend emerge over the last 18 or so months and I welcome anyone who can make the definitions more nuanced.