It is a light brown, live-action meatloaf, with various live-action vegetables around it. It is, of course, holographic.
Role in episode
Plankton states that this food is the only thing he can eat, due to his lack of money, and then proceeds to eat it with a fork. At first, he dislikes the meatloaf because it shows how unsuccessful he is in contrast to his arch-nemesis, Mr. Krabs, as well as how many times he has failed at obtaining the Krabby Patty secret formula. As a result, he slams the food off of the table in anger and refuses to eat it.
Later on in the episode, after the events of switching lives with Mr. Krabs turn out to be excruciating for him, Plankton returns to his normal life and develops a new-found interest for the meatloaf, then proceeding to "eat" it enthusiastically.
Plankton eating a hologram of meatloaf actually makes sense; real-life plankton gain energy through photosynthesis, and a hologram is a projection of light.