The inability to process the milk-sugar lactose that is found in milk and diary products. The affected person either suffer from a lack or reduced acitivty of the enzyme lactase, which is needed for cleaving of lactose in the intestine. Uncleaved lactose cannot be taken up into the bloodstream, accumulates in the digestive system and is fermented by bacteria. The fermentation process produces large amounts of gas, leading to bloating, flatulence and cramps. For more information, see wikipedia.
Leonard is lactose intolerant, which frequently is the subject of digestive humor in the show (0101, 0115, 0116, 0117, 0201, 0202, 0208, 0221, 0313, 0314, 0404). However, Sheldon observed that Leonard "can tolerate small amounts of nonfat ice cream without producing a noxious gas" (0117).