Paul Dickson's excellent book "Words" (Dell, 1982, ISBN 0-440-52260-7) traces "Foo" to an unspecified British naval magazine in 1946, quoting as follows: "Mr. Foo is a mysterious Second World War product, gifted with bitter omniscience and sarcasm."
Other sources confirm that `FOO' was a semi-legendary subject of WWII British-army graffiti more-or-less equivalent to the American Kilroy. Where British troops went, the graffito "FOO was here" or something similar showed up. Several slang dictionaries aver that FOO probably came from Forward Observation Officer. In this connection, the later American military slang `foo fighters' is interesting; at least as far back as the 1950s, radar operators used it for the kind of mysterious or spurious trace that would later be called a UFO (the older term resurfaced in popular American usage in 1995 via the name of one of the better grunge-rock bands).
Earlier versions of this entry suggested the possibility that hacker usage actually sprang from "FOO, Lampoons and Parody", the title of a comic book first issued in September 1958, a joint project of Charles and Robert Crumb. Though Robert Crumb (then in his mid-teens) later became one of the most important and influential artists in underground comics, this venture was hardly a success; indeed, the brothers later burned most of the existing copies in disgust. The title FOO was featured in large letters on the front cover. However, very few copies of this comic actually circulated, and students of Crumb's `oeuvre' have established that this title was a reference to the earlier Smokey Stover comics.
An old-time member reports that in the 1959 "Dictionary of the
TMRC Language", compiled at {TMRC}, there was an entry that went
something like this:
FOO: The first syllable of the sacred chant phrase "FOO MANE
PADME HUM." Our first obligation is to keep the foo counters
turning.
For more about the legendary foo counters, see {TMRC}. Almost
the entire staff of what later became the MIT AI Lab was involved
with TMRC, and probably picked the word up there.
Very probably, hackish `foo' had no single origin and derives
through all these channels from Yiddish `feh' and/or English
`fooey'.
:foobar: /n./ Another common {metasyntactic variable}; see
{foo}. Hackers do *not* generally use this to mean
{FUBAR} in either the slang or jargon sense.
:fool: /n./ As used by hackers, specifically describes a person who habitually reasons from obviously or demonstrably incorrect premises and cannot be persuaded by evidence to do otherwise; it is not generally used in its other senses, i.e., to describe a person with a native incapacity to reason correctly, or a clown. Indeed, in hackish experience many fools are capable of reasoning all too effectively in executing their errors. See also {cretin}, {loser}, {fool file, the}.
The Algol 68-R compiler used to initialize its storage to the character string "F00LF00LF00LF00L…" because as a pointer or as a floating point number it caused a crash, and as an integer or a character string it was very recognizable in a dump. Sadly, one day a very senior professor at Nottingham University wrote a program that called him a fool. He proceeded to demonstrate the correctness of this assertion by lobbying the university (not quite successfully) to forbid the use of Algol on its computers. See also {DEADBEEF}.