Timon is an extremely fast-talking Meerkat who thinks he knows it all. It seems to me like he's always trying to sell someone something before they really know what they're buying in to.
He's constantly telling Pumbaa about the way things are, and we get the feeling that he's making it up half of the time.
Timon got kicked out of the Meerkat colony because he didn't want to work like the rest of them. They threw him out because he refused to pull his own weight. Somewhere along the line, he got hooked up with Pumbaa, and they've been hanging out ever since.
For being a little guy, he sure makes a lot of noise.
Interestingly enough, the song "Hakuna Matata" was supposed to start with Timon's verse. For various reasons, it was removed from the song. A slightly different version of Hakuna Matata with Timon's verse still intact is on the spin-off CD - "Rythem of the Pride Lands."