From the Wikipedia entry:
A correlation swap is an over-the-counter financial derivative that allows one to speculate on or hedge risks associated with the observed average correlation of a collection of underlying products, where each product has periodically observable prices, as with a commodity, exchange rate, interest rate, or stock index.
Pricing and valuation
No industry-standard models yet exist that have stochastic correlation and are arbitrage-free.
Quants: get to work. EDIT: Mostly kidding, of course – unless you a) have some kind of affective disorder and b) work for a major bank or fund, this is neither exciting nor an opportunity for real arbitrage.