Originated in the movie Full Metal Jacket where sexy Vietnamese hookers would say 'Me luv u long time' to the soilders and they would sleep with them.
Nowadays it is...
1. Seen on some asain porn sites to attract guys.
2. Used in conversation to friends when talking about a hot asain chick.
3. What an asian woman will say to a white/black guy to turn him on.
Guy 1: "Whoa, check out that asain girl!"
Guy 2: "Oh hell yeah! Me Luv U Long Time baby! You know what I'm sayin'?"