What gives? means:
Inf. What happened?; What went wrong?; What's the problem?
Bill: Hi, you guys. What gives? Bob: Nothing, just a little misunderstanding. Tom's a little angry.
Bob: Where's my wallet? What gives?
Tom: I think one of those roughnecks who just walked by us has borrowed it for a little while.
According to this page on the linguistics of the phrase, it is not short for anything. There are a few theories about how it arose:
Regarding the issue of why what gives is anomalous, the best that I can offer (speaking now as an historical linguist) is to suggest that we turn to the history of the construction, but even there, full enlightenment is not forthcoming (see Joseph 2000 for more detailed discussion). The construction seems clearly to have originated in American English; the first attestation for what gives comes in 1940, in John O'Hara's Pal Joey, according to Wentworth and Flexner (1960: 574, s.v. what gives) and the Oxford English Dictionary (1989 on-line second edition).
Even with this late attestation, what gives makes for an interesting comparison with the German existential use of geben 'to give', in the impersonal form with an expletive subject, es gibt, as in Es gibt keinen Gott 'There is no god', itself anomalous from the point of view of the usual syntax and meaning of geben...
Some scholars however see what gives as having arisen via language contact, as a calque from German, an origin for it which would eliminate a basis for a Proto-West-Germanic prototype, but might allow for a different explanation for the anomalies this expression shows; that is, under such a view, it would show an anomaly because it is a borrowing in the same way that an expression like It goes without saying, calqued from French Ça va sans dire, does, with its unusual passive-like voice semantics for an active form of say. In particular, it has been suggested (Chapman (1986: 463, s.v.); see also Wentworth and Flexner ibid.) that what gives is a loan translation from German or Yiddish was gibt 'What's going on?'.
The site itself has an even more thorough explanation of the phrase. However, it is a phrase on its own, rather than an abbreviation of another phrase. It means "What's happening?" or "What's up?" It is usually informal, though, so you would not see this in formal writing. You can use it in conversation with others, and they will understand you. However, the tone is slightly negative, so be careful when you choose to use it.