It's a bean bag toss game. But it is more in how big it has become.For example:
http://chicagocornholeclassic.com/generalevent.html
http://www.americancornhole.org/
http://www.cornholeparty.com/play/
Note the Atlanta cornhole group: the Southern Holers (lol)
I was surprised like you when I first heard about it more than ten years ago. I thought it was a joke. Then I learned that it is a big deal in some areas, with neighborhoods holding tournaments and people having bleachers erected in their backyards, bringing in kegs, etc. It is a very big deal for some areas!
Here're pictures of cornhole in Clintonville, Ohio--see how they have set it up in a backyard, brought in planks to create seating for the tourney, etc:
http://www.flickr.com/photos/thechiefsource/4784672582/
http://www.flickr.com/search/?q=ohio+cornhole&page=3
http://www.flickr.com/photos/thechiefsource/4784674360/
http://www.flickr.com/photos/thechiefsource/4784680614/
scoring data on the computer
Not sure, but some games may require you hold your beer in one hand while you toss the bean bag with the other.
Just like Texas Hold 'em...they are likely playing for money.
As I looked for pictures for this post I wondered why cornhole has not hit Hollywood yet (in the movies)...and found this:
http://www.flickr.com/photos/cornholethemovie/4524238389/in/photostream