An almost archaic statement used by "Yippies" (The predecessors of Hippies, who were ultra-political and counter culture revolutionaries) to explain excitement, approval or irony.
Jerry Rubin: "Far out! I just scored a huge lid of grass, I'm gonna light a Doobie and use it to ignite this gasoline soaked American Flag! Yippie Dippie Do!"
Pre-Hippie-Burnout: "Groovy, but don't fart around that, the explosion will light my white dude fro, and totally harsh my mellow, maaaaan!"
(Tokes the spliff)