Here's what Wiki says about it:
Ectoplasm (from the Greek ektos, "outside," + plasma, "something formed or molded") is a term coined by Charles Richet to denote a substance or spiritual energy supposedly "exteriorized" by physical mediums.[1] Ectoplasm is said to be associated with the formation of ghosts, and hypothesized to be an enabling factor in psychokinesis.
Although the term is widespread in popular culture, the physical existence of ectoplasm is not accepted by mainstream science. Some tested samples of proposed ectoplasm have been found to be various non-paranormal substances, including chiffon and flakes of human skin.[2][3] Other researchers have duplicated, with non-supernatural materials, the photographic effects sometimes said to prove the existence of ectoplasm.[1]
Since its inception in the field of spiritualism, the concept of ectoplasm has escaped to become a staple in popular culture and fictional supernatural lore. Notable examples include Noel Coward's 1941 play Blithe Spirit, and the 1984 film Ghostbusters; in which ectoplasm secreted by ghosts is portrayed as viscous, cloudy and greenish–white, similar to nasal mucus, famously referred to in Bill Murray's line, "I've been slimed!"http://en.wikipedia.org/wiki/Ectoplasm_(parapsychology)Personally, I don't believe it exists. I think some people coin the term to explain why there's mist or smoke in their photos... that's just my opinion though.