What this means is that, while you are relatively far away, yet close enough to hear the conversation, you listen to a couple of bad guys talk to each other. This can be done on the first level. You will come up to two guys talking to each other at a waterfall. Simply stand away, put your controller down, and listen through their entire speech. The "listen to 5 creature conversations" can have the same speech used multiple times, so go ahead and abuse it while you replay this level while going for extra lives/creature leveling up. If you're wondering what I'm talking about, check out what I said under the "get 9 lives" and "get 15 lives" achievements.
It will unlock after you hear the 5th conversation in full.