In my day...it meant "extended play". When vinyl records were popular, single longs were put on 45's....then some of the artists started recording longer versions of one song that wouldn't fit on a 45, so they made and "album" sized vinyl that had only one song on each side, but obviously a very extended version.
EP stands for Extended Play. It is a mid size CD that allows you to record more music but at a lower quality. EPs were first discovered in 1919 by a recording company known as Grey Gull Records. Visit http://en.wikipedia.org/wiki/Extended_play for more information.