In a recent exchange with a highly eloquent friend (we were discussing a particularly peculiar episode he has pointed to me in a book) he replied to my comments on the episode with an idiom I've never heard before (being an ESL guy). He said literally "Not biting, eh?". What does this mean?
"Not taking the bait", from fishing, meaning someone offered you a conversational opening (or an invitation to an argument) and you didn't follow up.
To bite in this context means "to respond to a provocation or temptation". The phrase is understood to refer to a fish biting a baited hook, or possibly to Eve biting into the forbidden fruit.
So in context, something had happened that your friend expected to elicit a response from you. When you didn't respond as expected or intended, he remarked that you were "not biting".
The other answers are great. Another way it's used is when I read a provocative article (as JSB suggests) and in response I'd say "Ok, I'll bite." I then offer my thoughts on the subject.
Interviewer: Why....it's OK to go into the movies and enjoy the violence?
Quentin Tarantino (Annoyed): Yeah...well...it is a movie. It's a fantasy, it's a fantasy, it is not real life. It's a fantasy. You go and you watch...you know...you watch...you watch a Kung-fu movie, and one guy takes on a hundred people in a restaurant. That's fun.
Interviewer: But why are you so sure there is no link between enjoying movie violence and enjoying real violence?
Quentin Tarantino (furious): I don't...I....well...I am gonna tell you why I am so sure. Don't....don't ask me questions like that. I am...I am not biting. I refuse your question.