Foo or any such word used this way is formally known as a metasyntactic variable. Eric Raymond, probably the world's greatest authority on foo and other metasyntactic variables, also lists qux, waldo, fred, xyzzy, and thud among others that are occasionally used. Although foo is the canonical metasyntactic variable, Raymond notes that cultures outside the United States have their own preferences. Fred, barney, and wombat seem common in the U.K. Toto, tata, titi, and tutu reportedly are used by the French. Blarg and wibble are used in New Zealand.
The origin of foo seems wrapped in the mists of time, but Raymond observes (and we remember) that in Bill Holman's comic strip of the 1930-50 era, Smokey Stover, the letters "FOO" commonly appeared, unexplained and as a kind of running gag, on license plates, in picture frames, and on the backs of sandwich board signs.
(nothing new, but thought it was interesting enough to post)