Its a trusted member on the site. Say you are buying a GT for 20$ the buyer sends 20$ to middleman, the GT owner then sends information to account to the buyer once its verified it works etc, the MM will send the money to the seller. basic example
A Middleman is a monitor for the trade, there is no direct contact between the buyer and seller. They make everything go smoothly in the trade. I've done many Middleman jobs, mainly revolving around tags. What I do is get the info for the tag, secure it completely so the seller can't recover it during or after the trade. I have the buyer send the money to the appropriate email, and once confirmed, message the buyer the info. If you're looking for a Middleman, check out my thread here http://www.forumkorner.com/thread-3005.html where you can also see my vouches, and send me a PM.
Pleas look a little before making threads as there is a stickied thread in the mm section explaining it all. Refer to the link below to learn more about mm's.