High-fem is an adjective most often used to describe non-masculine homosexual women. Basically, the high-fem dyke is the antithesis to the butch dyke.
The term is most often used by butch dykes to describe their more feminine counterparts. For example, k.d. lang (a butch) might refer to Portia de Rossi (a fem) as "high-fem" in conversation, when describing her to someone else. (For a better example of butch/fem dynamics, watch the wonderful Wachowski Brothers film Bound, starring Gina Gershon as the butch and Jennifer Tilly as the fem.)
Unlike the term "butch," which comes from a common name for men and boys in the 1940s and 1950s, often of the auto mechanic/construction worker type (see Rosie the Riveter for an example of the cultural (re)claiming), the etymology is fairly clear, given the lack of metaphor inherent in "high-fem."
High-fem, also like butch, is a stereotype. It's a general term used to describe any lesbian that employs the use of makeup, dresses and skirts, and other typically feminine accoutrements, as well as body hair removal, excessive skin care, painted fingernails, etc. The high-fem dyke is the stereotypical partner to the butch dyke, and the stereotypical object of desire for butch dykes, who, in rejecting their own outwardly-displayed femininity, are more apt to appreciate women who proudly display it.
While it is a stereotype, it's generally ignored by mainstream media in favor of the more "obviously" homosexual butch dyke, just as effeminately gay men are the media's chosen fodder to represent gay male culture. There is an exception to the rule, as always, though. You may have noticed that on any network television show, theatrically-released movie, or made-for-TV movie where two women kissing is presented, the two women are always, universally, fems. (Even in Bound, Gina Gershon's butchy character was far more feminine than the average butch dyke.) This is done to draw a larger audience, most likely the coveted "males 18-34" target group, who most likely would rather see two traditionally attractive women together than one attractive woman with another woman that looks like she might have worked on your car last week.
In many dyke bars, a fairly standard ratio would be one high-fem dyke to four butch dykes.
High-fem dykes, if they can be called that in this example, are also those portrayed by straight porn performers (I hesitate to use the word "actresses" to describe them) in 99.99% of male-oriented lesbian pornography. Real lesbian erotica (the sort that's actually aimed at real lesbians) generally consists of a high-fem and a butch, though rarely in groups exceeding two of either.
High-fem dyke couples are reportedly rare.