`Gedanken' is a German word for `thought'. A thought experiment is one you carry out in your head. In physics, the term `gedanken experiment' is used to refer to an experiment that is impractical to carry out, but useful to consider because it can be reasoned about theoretically. (A classic gedanken experiment of relativity theory involves thinking about a man in an elevator accelerating through space.) Gedanken experiments are very useful in physics, but must be used with care. It's too easy to idealize away some important aspect of the real world in constructing the `apparatus'.
Among hackers, accordingly, the word has a pejorative connotation. It is typically used of a project, especially one in artificial intelligence research, that is written up in grand detail (typically as a Ph.D. thesis) without ever being implemented to any great extent. Such a project is usually perpetrated by people who aren't very good hackers or find programming distasteful or are just in a hurry. A `gedanken thesis' is usually marked by an obvious lack of intuition about what is programmable and what is not, and about what does and does not constitute a clear specification of an algorithm. See also AI-complete, DWIM.