This word describes a Westerner who is socially inept in (and sanctimoniously disdainful of) his own culture (most of them are male), and decides to go to Japan, hoping that his status as a foreigner will make him friends there. Most normal Japanese avoid interaction with nippo-taku, but there are many foreigner-loving Japanese who will encourage more nipp-otaku to make the jump across the sea.
Nipp-otaku usually marry a moderately attractive Japanese woman, and then do so much more than "go native." They refuse to acknowledge other foreigners when in Japan--instead, they regard any foreigners' lack of understanding of Japanese culture as a negative judgment upon them. Nipp-otaku insist on wearing traditional Japanese garb, even when no other Japanese are doing so, and often insist that their wives treat them like samurai. The basic nipp-otaku attitude attempts to show Japanese people how to be Japanese.
Imagine Sean Connery's character in "Rising Sun"--minus every ounce of coolness. Nipp-otaku don't merely assimilate into Japanese society. They insist on attempting to be Japanese to foreigners, while knowing deep within that the Japanese will always see them as foreigners. This creates considerable self-loathing, and becomes evident in their generally passive aggressive way of dealing with the world around them.
Jack: What? you mean that nerdy douche that always walked around looking like he smelled something rotten?
Jim: That's the one. He moved to Japan, and uhh, looks like he's trying to become Japanese.
2) I've lived in Japan for over a year, and I can definitely say that the worst thing about living in Japan is the stigma on foreigners resulting from the nipp-otaku.
3) I'm a total Japanophile. I love all things Japanese, but I am happy with my own identity, and I hate it when people call me a nipp-otaku.