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Vocaloid is a software developed by Yamaha Corporation. Many different characters have been released for vocaloid, each character as his/her own voice and appearence that users of the software are able to use for singing.
Vocaloid was pretty unknown when it was first released and remained so until the Vocaloid 2 series when Miku Hatsune was released. Then Vocaloid exploded in popularity mostly thanks to the Japanese video sharing site Nico Nico Douga and later Youtube. Right now Vocaloid, mostly Miku Hatsune, is very popular in Japan and is starting to become known to the rest of the world.