Definition:
Someone who gives unwanted advice; someone who tries to run things even though they don't have the power or authority to do so.

Example:
1) Rob is the worst back seat driver I know - he's always telling me what to do.
2) I wish I could tell my boss to stop being such a back seat driver. I don't need to hear his comments every ten minutes!

Etymology:
Sometimes people riding in the back of a car will give advice to the driver; this is usually more annoying than helpful. This phrase can be used literally (in a car) or more generally to make fun of someone who is giving unwanted advice.