Here is a link that explains argumentum ad hominem. The idea is that instead of replying to the argument someone makes, the other person just attacks the person or their character, in an effort to distract others from the original argument. In many cases, it is just a personal attack to distract everyone involved in an argument from the facts of the argument.
It is uncommon. In fact, I would say it's quite rare to state it this way (edit: in regular conversation and print, but perhaps it's a bit more common in certain settings--we're talking about the actual phrase, not the behavior, right, Nun-T?)
How common is it? It depends on the setting. You probably would not hear it said by friends sitting around and passing the time of day. On the other hand, in formal argumentation, in journalism, in... ahem... forum moderation, it is not very uncommon at all.