I get asked this a lot since I'm not currently working. I never get to answer clearly, so here's an attempt.
The short answer is: Whatever I want
The long answer:
Yes, I spend a lot of time goofing around -- watching TV series, movies and playing video games. In fact I think for most of the first two months of my hiatus, this was what I did. Now there's a lot less of that -- I've caught up with all the series I wanted to catch up with, and I don't have any significant video games I want to finish. (That may change next week with the release of Starcraft 2 :p). I don't actually watch stuff on television unless I'm having a meal though.
I read a lot. Mostly online reading (so having an IPad would be nice, hah!). A lot of articles about a variety of topics such as entrepreneurship, new technologies, mobile application development, casual gaming development. Hacker News is a fair approximation of my usual reading material. I probably spend 2-3 hours each day on reading.
I'm working on some small projects. Not work stuff, not freelancing or anything like that. Just some tools/apps, many of them for my own usage (‘to scratch an itch", as the saying goes). Often I will start building an app just to try out a certain API or technology. In the past 2 weeks I've looked at: Scala, Ruby, the Android SDK, Google App Engine, the Facebook Graph API, the Twitter API, the Plurk API, Git and Mercurial. It's only recently that I'm getting back into the swing of coding (and seeing my own terrible bugs :p), and I hope to scale that up in the coming months. I want to write more apps that I can release for public consumption.
Something people who've been employed all the time don't realize: even if I have a lot of free time, I'm still lazy. :p So there are a lot of backlog tasks I've been meaning to do since forever that I need to get around to. Mostly involves organizing stuff, getting rid of unneeded stuff, returning stuff. Stuff has a maintenance cost, so we should have a lot less of it!
I'm currently not earning any money and am still considering future plans. It's fine, I can still survive for a while. There are a lot of options, and getting back into a regular employment scenario is only one of them. The more conventional options are getting a job again and/or working abroad (probably Singapore). My brothers and I talk constantly about starting our own company: consulting/software dev (need to find clients), or product development (IPhone/Android... but we're still balking on the high price of entry to the IPhone market, i.e. need a macbook!). A friend of mine keeps telling me we should start working on a casual game, our own Plants vs Zombies as it were. I'm inclined to look into some sort of product development myself, in fact I already have a few design ideas for a casual/social MMO (similar to Castle Age... I like to claim I'm doing research when I play it).
So that's the current status. I'm still not sure exactly the direction I should be going -- it's always been one of my weaknesses that when there are a lot of options available I have difficulty making a decision promptly. Getting a job again is the safe yet boring choice; at the same time I'm not sure if I'm equipped with the necessary discipline to handle the more challenging options such as starting my own company.
In any case I'm not really in a hurry. The whole point of the hiatus was figuring out what I want to be doing. I'm not sure yet, so hiatus is not yet over. 😀