Literal translation from Japanese is "It's cute"
Some one gives you a teddy bear you say "Kawaii desu ne" - meaning "It's cute, isn't it?"
1. Uses it to describe their favourite anime character.
2. Puts it randomly in a sentence to make themselves look cool.
1. OMG SASUKE-SAN IS SO KAWAII DESU!!!!!!
2. iem a random whacky one wunt sum kawaii desu cukies? :3333