Google says:
Dear Cecil:
Why do people hang catfish heads from their fences? I have looked everywhere and cannot find an explanation for this behavior. - Teresa, via the Straight Dope Message Board
Cecil replies:
Obviously you've never fished for catfish. They don't have scales, so it's fairly simple to clean them by pulling their skin right off. However, they're slimy and often pretty big, so skinning them is a two-handed job made considerably easier if you nail the head to something first. From there it's a short step to nailing up fish heads as a rural design statement. The resultant roadside displays do much to break up the monotony of a long country drive.