It refers to the author writing a character who is an awesome, perfected version of himself, or himself as he wishes he could be, ie. an unrealistic character.

Personally I don't really mind when authors do that, because otherwise, how would we get awesome characters? Kvothe is far from perfect though. Even when it comes to women, Fela explains why she would never want to be with Kvothe, and he can't win the one woman he actually wants. And he makes a great many poor decisions.

Also I think that since Kvothe is literally the one narrating and telling the story, there's a chance he is exaggerating some aspects of himself or his story, in which case Kvothe would be some sort of meta-Gary-Stu (or Sue) of himself.