Ok, so I have been wondering this for a very long time - just what is Hatsune Miku and all the other vocaloids? I know it's from a voice synthesizer, but do individuals make the videos (so many of them), or do particular companies? And also, how exactly do the vocaloid characters themselves shown up on the videos? I don't have the software, but does the character show up when a song is made (like arranging the clothes and having the character appear in the program)?

Then, as for the songs themselves, are they made entirely or taken from other songs?

I'm just really confused about this, and would like to know more because Wikipedia didn't quite give me a good understanding.

Nulla in mundo pax sincera
"Always go too far, because that's where you'll find the truth." - Albert Camus

The vocaloid are a brand of voice synthesizers, there are others that belong to various companies. Hatsune Miku being the most popular, basically a vocaloid is just like an instrument, you can make them play various notes like you would a piano or guitar. Anyone can purchase the software and what you make with them from then on has nothing to do with the company that manufactures them. So the music produced is made by individuals who bought the product, some are groups collaborating (like Supercell) or bands who need a vocalist. Songwriters and composers can use them when they don't have a vocalist, vocaloids are able to hit and hold notes that they are told to through the program. The popular vocaloids have avatars that are their official designs, all the hype from then on is fan driven. Since they have avatars, illustrators like to work with them too. Many times a producer will get help from an illustrator who will make the images that fit with the song they create, then they'll get someone else to design the video. So the videos you see are usually a group effort of the producers, illustrators, and more. The producers arrange all the music, they rarely borrow from other songs, all the accompanying music is done by them. And by having the character appear...you may mean MMD which is MikuMikuDance a freeware program that allows people to animate 3D models. Did I manage to answer any questions?

So all of the Vocaloid videos are fan made all together with lyrics and music? Wow...

Nulla in mundo pax sincera
"Always go too far, because that's where you'll find the truth." - Albert Camus

Yes, but there are some professionals who make the music, such as SignalP. And a lot of the people who write songs for VOCALOID end up becoming professionals and publishing their VOCALOID songs. Like 40meterP, Deco*27, etc.

And then there is all the merchandising associated with the vocaloids. You can also look at the song "Black Rock Shooter" as a special case, it inspired video games, an OVA, an anime series, figmas, general merchandise, and the manga spin-offs like Black Rock shooter - innocent soul.