I knew what it meant, but didnt know where it came from...
I googled and found this: 'how's your father?' catchphrase associated with the British music-hall comedian Harry Tate (1872-1940). Apparently, he would exclaim it as a way of changing the subject and in order to get out of a difficult situation. The phrase either subsequently or simultaneously took on a life of its own meaning the same as a 'thingummy' or anything the speaker did not wish to name. From that, in phrases like 'indulging in a spot of how's-your-father', it became a euphemism for sexual activity.