What's up?

You would answer "Not much.  How 'bout you?"  The phrase "what's up" can be translated as "what's going on" or "is there anything going on here?".  But, honestly, it's really just a greeting, albeit one in which you wouldn't respond "I'm well" or "I'm not well."  By answering "not much" you are essentially saying "there is not much going on here," which means "everything is okay here" or "I am okay."  " 'bout" is an abbreviation for the word "about."  I hope this helps.