Code: that element of modern communication by which liberals understand conservatives to mean things they have never actually said.
In other words, if liberals can't actually find you saying the evil things they fondly imagine you saying--and lately, what they want you to have said are things more vile than they have said, lest all the air get sucked out of their hateful-conservative-rhetoric-drove-Loughner-over-the-edge balloon--they feel perfectly free to make things up. The instant liberals start talking about "code," it's a tacit admission that you, you evil conservative, you, haven't actually said anything that they can successfully demonize. Not to any normal person, anyway. For example, "Rush Limbaugh's racist code" means that Rush hasn't actually said anything racist, at least not anything that any normal person would recognize as racist.
Oh, let 'em have fun. They haven't yet realized that fewer and fewer people believe their crap with each passing day.
Those liberals who don't actually pull this sort of crap, and of course I know some: don't take it personally. I didn't mean you.