Mr. Fluff was an "easter egg" Animated, who's origin was from a masquerade party thrown in Barton Town by a guild. The owner of the guild's birthday was that day (though that wasn't the reason for the party), and there was a fluff that spawned from the fountain - "CleosPet". Users kept killing it, so the developer, Halzy, made it CL 20.0. Mr. Fluff is a reference to this birthday pet. 
The Mr. Fluff could be spawned by going to the Barton's Bar and clicking on Halzy's box, the fluffs would follow users around, and could also be brought outside of the bar. There were reports that the fluffs would be docile until they were attacked which would cause one to be dazed instantly, though these fluffs were able to be beaten.
When it came to the early version of Mr. Fluff there was a glitch, he dropped CL 17+ rings, but after that was fixed he dropped the normal loot that usually comes from an average Fluff animate. The ability to spawn a Mr. Fluff has since been disabled around December 09, 2009.
There are rumors that some of these players who got the rings still exist.
April Fools' Day 2010 Edit
Mr. Fluff made a cameo return at April Fools' Day 2010, being both obtainable and functioning the same as his 2009-self.
Players reported spotting him on almost all maps, and appearing in large groups on about 10 of them at once.