'kopi' is an indonesian word for coffee; 'luwak' is the local name of the Asian Palm Civet.
The enzymes in the stomach of the civet contribute to the coffee flavor by breaking down the proteins that give the coffee its bitter flavor. The bean is slightly roasted to give the coffee bean aroma.
In early days, beans would be collected from the 'latrine' in the wild, but now the civets are fed with raw berries, faeces produced are processed, and coffee beans are offered for sale.
Kopi Luwak is the most expensive coffee in the world, costing $50 per cup. It is sold mainly in Japan and the United States, however it is becoming increasingly available elsewhere.