I say: 'I help companies make their software easier to use. Websites too.'
And then if they look as if they're remotely interested after that point I move on to say something that most people identify with and that is: 'I bet you've come across software or a website that is really awkward or annoying to use - well I help companies make them more enjoyable to use - making sure people have a better experience'.
At which point most people will tell you about a piece of software or a website that really annoys them for some reason, and ask if I had anything to do with that. Then they'll ask if I can help them do something in Word that they haven't managed to work out and then ultimately: can I help them fix a problem with getting their webmail, and the internet seems really slow lately, oh and by the way, whilst I'm there, the mother-in-law has been having a problem with ordering a new set of saucepans online - can I help.
Then I say 'I don't really know why your internet is slow, but I guess I can take a look' and then 'What problem has your mother-in-law been having', and before I know it I've spent all afternoon trying to find out what the problem with the email is, and I'm hot and bothered because I can't fix their broadband, and I've wasted the mother-in-laws time because I ran into the same problems she did. And then I get told 'I thought you helped make things easier to use' - you're not very good are you!'
And then I just wish I'd said 'I write software, how about you?'. [sigh]