Why do some people use "how's it hanging?" as greeting? What is "it" referring to?
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As with up in your other question, hang has many meanings, not all of them related to an act of suspension. For example, hang out can certainly mean ‘place garments on a washing line to dry’, but it can also mean, among other things,’reside, lodge or live’.
As Alan B suggests, How’s it hanging? may well have the genital origin that Partridge attributes to it. In answer to your comment about its application to women, I would guess that that is rather beside the point, as I suspect it’s an expression almost entirely confined to men.
It is often used in English without any very specific meaning, as in It’s raining. In How’s it hanging? it refers to life in general.
In 1964 at the very end of the school term in mid June, I was walking down a long hall way alone when from the other end of the hall came a member of the schools ruling clique. This fellow and I had been friends years before in middle school. He had gone on to become successful with in the "in" crowd while I had not and hence faced the constant snubbing this group put out.
Having been friendly a one point in the past, I considered greeting him as we approached one another. Just how might I speak to this golden Adonis I wondered. Probably a simple "how's it going" I figured and began to speak, as he surely would not step below his station and greet me first. Then, half way through my short sentence my mind raced to the thought that it was indeed the last minutes of the school term and a fair well greeting would be more appropriate and I tried to instead say" hang in there." What came out was " how's it hanging"
He walked a step or two, slowed, his face lit to a smile and said " long and heavy man, long and heavy"
This was mid June of 64 at Hayward High School in the East Bay of the San Francisco Bay Area.
The following September at the onset of the new term, the term how's it hanging had become the familiar greeting among the boys of that clique and from this quickly spread within a few weeks around the Bay Area.
That's my story and I'm sticking to it.
Commonly used as a greeting in HS in rural Massachusetts in the '64 to '6 period, clearly with the sexual implication.