Well, it's the sound effect used in manga to represent a smile. Usually a character will be pictured with their eyes shut, smiling happily, and right next to them is a little 'niko' written in hiragana. Usually there are only 1 or 2 nikos next to a character, but sometimes when they are really, really happy, there are a LOT :) I like when manga characters 'niko-niko' because while one character is happy, it usually happens that the character being smiled at has a horrified reaction to the smile. It can be a slightly evil smile sometimes! ^_^ Soon I will include a couple of examples of characters niko-nikoing scanned from manga.