The Umbraco MVP stands for Umbraco Most Valued People*.
It's an award given for outstanding contributions to the Umbraco community. Either through help in forums, producing fantastic packages or contributing with knowledge in the wikis and blogs. It was first given at the CodeGarden '07 conference and MVPs are officially announced during that event too. Since 2010 the selection of MVPs relies entirely on community voting.
As an MVP you get free Umbraco certification, gets free entrance to the CodeGarden conference and get invited to the annual three day Core/MVP retreat just before the CodeGarden conference. The Umbraco HQ pays for your stay as well as (most of) your plane ticket.
Neither core team members or employees in the Umbraco HQ can become an MVP.
* Other projects/organizations have MVP programs as well, and here the P is often Professionals. We don't care if you're an amateur. We care if you're among the kindest people in the community. C'est tout!