UTAU is a Japanese singing synthesizer software created by Ameya/Ayame. The UTAU program is similar to the VOCALOID software, however the UTAU program is free to download and use; there's also a version of the UTAU program for Mac called UTAU Synth which makes it possible for anyone to create an UTAUloid.
UTAU's program icon / logo
A screenshot of the UTAU program's interface
UTAUloids, similarly to VOCALOIDs, are virtual singers to put it simply. To make an UTAUloid, a user would record samples of themself talking/singing strings of syllables in almost any language, sometimes recording the same reclist (recording list or recite list) multiple times at different pitches to achieve a voice with a wider singing range. These collections of recordings are referred to as a voice library or voicebank.
There's also a visual appeal to UTAU, as users often create and illustrate characters to represent their voicebanks in the same manner as VOCALOIDs. While most users tend to create human-like characters, there are some users who have created animal-like characters, mythical creatures and even given life to inanimate objects to represent their UTAU voices, proving just how creative the development process can be and that an UTAUloid can be just about anything anyone can think of.
Some UTAUloids you might recognize
The default voice of UTAU; built into the program
Also known as 唄音ウタ (Utane Uta)
デフォ子 (Defoko) by 飴屋／菖蒲 (Ameya/Ayame)
Voiced by AquesTalk
Illustration by CAFFEIN
The 'face' of UTAU; often mistaken for a VOCALOID at first
重音テト (Kasane Teto) by VIPPERLOID / TwinDrill
Voiced by 小山乃 舞世 (Mayo Oyamano)
Illustration by SEN
It's most common for users to have their voicebanks sing covers of existing songs from many different origins, genres and languages, the most notable being songs that were originally composed for and sung by VOCALOIDs. However there are some music producers within the UTAU fandom that compose original songs specifically for their own and other fan-made virtual idols.
UTAU related Websites
Read the Wikipedia article
UTAU Official Site
Download the program
Make a wiki page for your own UTAU
The largest English speaking UTAU forum