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According to Poison guitarist C.C. DeVille, the phrase "Unskinny Bop" has no particular meaning. DeVille wrote the music and used the phrase as a placeholder for the lyrics, which lead singer Bret Michaels would write. When their producer Bruce Fairbairn heard the phrase, he thought it was perfect for the song, even though he had no idea what it meant.
Poison formed in Harrisburg, Pennsylvania in 1984 as Paris. They moved to Los Angeles in an ambulance Michaels bought for $700 and begin playing in clubs there. When their guitarist quit, they chose DeVille over Slash and Steve Silva, who also applied. Slash eventually joined Guns N' Roses and Silva was in the The Joe Perry Project. Poison got a record deal in 1986, disbanded in 1994 and re-formed in 1999. (thanks, Edward Pearce - Ashford, Kent, England, for above 2)
On the 2002 Poison album Hollyweird, there's a song called "Home (Bret's Story)," where Michaels sings: "I eat dinner with Nick Cage and Charlie Sheen, Nick asks me what the hell 'Unskinny Bop' means, it's slang for CC banging a porno queen." (thanks, Jeff - Milton, Canada)