There’s a common line in soap commericals that goes something along the lines of “This soap is pH balanced, for soft, smooth skin.” The claim about the soft, smooth skin may or may not be accurate, but what does “pH balanced” mean?
The pH scale is a measurement of the acidity of an aqueous (ie, water-based) liquid compound. The capital H indicates that it’s a measurement of hydrogen ions (denoted H+ in chemical notation); the definitive meaning of the p is lost to the sands of time. A low pH value means that the solution is acidic, and has more H+ ions than OH- ions, while a high pH means the solution is basic (or alkaline — the two terms are interchangeable) and has more OH- ions than H+. The more extreme the inbalance (ie, the lower or higher the pH) the stronger the solution, and the more likely it is to eat through your skin if you spill it.

The fluid in the flask on the left is more acidic than the fluid in the beaker on the right is basic.
The precise value of the pH of a solution is given by the negative logarithm of the concentration of hydrogen ions in the solution, though there are compounds that can act as catalysts in specific solutions that will alter the measured pH. Logarithms are a useful way of describing quantities that vary of a wide range of scales. Mathematically, if x = b^y, y = log_b (x).

Logarithms are typically either in base 10 (ie, b=10) or base e (ie, b = e = 2.718…; these are also called natural logarithms). The most commonly known logarithmic scale is the Richter scale, which measures the strength of earthquakes. The Richter scale is a base 10 scale, so an earthquake of magnitude 6.0 is 10 times stronger than an earthquake of magnitude 5.0, and 1000 times (ie, 10^3 times) stronger than an earthquake of magnitude 3.0.
Similarly, the pH scale is a base 10 logarithmic scale. A solution of pH 4.0 is ten times more acidic than a solution of pH 5.0, and 10 times less acidic (ie, more alkaline) than a solution of pH 3.0. The scale runs from 0.0 to 14.0, (explain why zero can be reached due to catalytic reactions and whatnot)

Click to enlarge.
The pH of a solution can be tested using a variety of compounds called indicators that are known to change colour at specific pH values. Indicators do not generally interact with the solution, and so do not drastically alter the chemical mix in the solution. An indicator can be added to a solution, and then the solution can be titrated (ie, another solution is dripped slowly into the original solution to reach a desired pH) until the indicator changes colour. The colour change of the indicator indicates that the solution has reached a specific pH. Litmus paper is a crude indicator: it will indicate if a solution is acidic or basic, but does not determine exactly how acidic or basic the solution is.
In a general sense, then pH balanced, means that the solution in question has the same pH as its surroundings. Skin has a pH of around 5.5, so in the context of facial soap, the manufacturer may be using “pH balanced” to mean that the soap has a pH around 5.5, so the soap will not undergo an acid-base reaction with (and thus irritate) the user’s skin.