Kasane Teto was created as an April Fools joke by the VIPPERs of 2ch, meant to trick Nico-Nico Douga users into thinking she was the 3rd Vocaloid from Crypton.
She is a young girl with red eyes and red hair that she keeps up in drill-like twintails. She typically wears a dark blue/gray outfit with red trim. Her official profile lists her as a "chimera", so she is sometimes given characteristics like a forked tail or wings. Her character item is a loaf of french bread.
After the joke was over, instead of fading into obscurity Teto was picked up by UTAU, a freeware knock-off of VOCALOID. She has maintained a level of popularity, and many have tried to replicate this effect with other joke and fanmade characters since.
Note: Unless Teto is present with an actual VOCALOID character, please do not tag Kasane Teto as a VOCALOID, she is an UTAU.