, DSS stands for the Digital Signature Standard. This is a system for digital signatures
created by the US Governement (who does not want the plebes to have full public key cryptography
) in order to support digital signatures without supporting public key cryptography. Their intent was to allow export of DSS, while denying export of public key cryptography.
The DSS algorithm (DSA) have significant problems with subliminal channels (AKA covert channels), allowing implementation to transfer data beyond the signatures themselves in the signing process. This can be used to rapidly leak the private key, so DSA implementations have to be verified to generate good random numbers, rather than leaking key bits. This means that using non-Open Source DSA implementations is a bad idea.
DSA is based on the Discrete Logarithms problem. A description how to turn this into a signature system is here.
The DSA algorithm is supposedly in conflict with a patent by Schnorr; this patent does not expire until 2008.