What does it mean?

When I get to the merchant at Longeye's Ledge (and a few other Norn as well) and click on him, he says what sounds like "WORMS BLOOD".
What does that mean? Is he insulting me? Is it an expletive from creeping up and surprising him?

It is actually an insult. Most Eye of the North NPC's will respond to you according to how high or low your rank in their respective title is. At lower ranks, they'll say things along the lines of, "Why are you wasting my time?" But at higher ranks they'll say more respectful things.

Firstly have a look at this wiki page

"Wurm's blood!" is one of their Voice responses to r10 players, so it's probably not meant to be insulting...

Ok thanks, I didn't know about the different responses. I should maybe get out a little more and read the wiki.
Sorry if I posted in the wrong area too.

Sounds like an exclamation to me. He's most likely caught unaware.

Wurm is one of the animal spirits the Norn revere.

http://wiki.guildwars.com/wiki/Spirits_of_the_Wild

It's like how a Christian would exclaim 'oh my God!' when something unexpected (but positive) would happen. So no, not an insult. The Norn are really baffled by your awesomeness.