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It is a boat where Mr. Krabs was the head chef. Little is known about it other that Mr. Krabs worked there and that it presumably sells horrible food.
Mr. Krabs was asked by Squidward if he served on a restaurant called the S.S. Gourmet which he said he did. He later reveals that he mistook Squidward for saying S.S. Diarrhea and that he cleaned the bathrooms of the S.S. Gourmet.
It is very likely that the ship Mr. Krabs was on in "Pull Up a Barrel" was actually the S.S. Diarrhea. However, Mr. Krabs knew how to cook food on that ship, though the food probably caused cramps and diarrhea, hence the name.