That is Leet, an internet writing code. If you are willing to 'invest' the time to learn it (I don't have that kind of time) you can start here: http://en.wikipedia.org/wiki/Leet
pnwd, pnw3d, or own3d = "owned", meaning something amongst the lines of, "I 'upped' you one", or "I beat your nice person"! 1337, l337, I think means, "elite" h34r:
pwned means that someone was owned, beaten badly. I think this originated in gaming, or I at least first started seeing it in a gaming context. EDIT: It now seems to have made a jump to if someone bests someone in a debate online or points out the flaws in the person's posts, the person says they pwned the losing poster.
Doh! Yea, what he said! Caught me in the middle of replying. I would concur, 1337 is approximate to I have skills, I am cool, I'm a badass. I think they may have said leet on Hackers, anyone know for sure?
Ok, I figured it was owned, but couldn't understand the p instead of o. They are side by side on the keyboard so it's not a convenience issue.
LEET also typically involves the use of numbers or letters or combinations thereof that resemble (at least phonetically, somewhat) the words being written. i.e. "3y3 @/\/\ +3H L337 /|/|457eR!" would be read as "I am the LEET master!" (Yes, "the" is often spelled "teh" in LEET.) Megatokyo.com publishes a series of webcomics in which one of the main characters is very L33T. B)
Originated as a term used by hackers to describe gaining possession of a system, having hacked a box and got root they basically control it as much as if it was theirs, thus it could be considered owned by them. From this it was encorporated into the cultures vernacular including the limited(and awkward to type) vocabulary of so called l33t speak(0wn3d) Would-be hackers would come to use the phrase when taking someone out with a ping flood or other DoS attack, and although no access to the victim's system (typically another newbie hanging around on the same irc channel speaking in numbers) was gained yet they were still said to be owned. From there is came to simply mean bettering (or f*****g over) someone and was even used to describe non-computer based events as described in the many other definitions. Though now its most common in CS games when someone kills you... To be defeated in a computer game, causing the winner's ego to inflate like a party balloon as if such a victory has any tangible significance outside that of his stinking socks-infested dorm room. These people will frequently create animated GIFs of violent sports events where a player gets clobbered by his opponent, complete with blinking neon "PWN3D!" captions, and post them on their blogs to indicate that they should not be messed with.