About the Lunar New Year aka Chinese New Year

Cut and pasted from http://en.wikipedia.org/wiki/Chinese_New_Year:

Chinese New Year or Spring Festival is the most important of the traditional Chinese holidays. It is often called the Lunar New Year, especially by people in mainland China and Taiwan. The festival traditionally begins on the first day of the first lunar month (Chinese: 正月; pinyin: zhēng yuè) in the Chinese calendar and ends on the 15th; this day is called Lantern Festival. Chinese New Year's Eve is known as Chúxī. It literally means "Year-pass Eve".

Celebrated in areas with large populations of ethnic Chinese, Chinese New Year is considered a major holiday for the Chinese and has had influence on the new year celebrations of its geographic neighbours, as well as cultures with whom the Chinese have had extensive interaction. These include Koreans, Mongolians, Nepalese, Bhutanese, Vietnamese, and formerly the Japanese before 1873. In Mainland China, Hong Kong, Macau, Taiwan, Singapore, Indonesia, Malaysia, the Philippines, Thailand and other countries or regions with significant Han Chinese populations, Chinese New Year is also celebrated, and has, to varying degrees, become part of the traditional culture of these countries. In Canada, although Chinese New Year is not an official holiday, many ethnic Chinese hold large celebrations and Canada Post issues New Year's themed stamps in domestic and international rates.

Although the Chinese calendar traditionally does not use continuously numbered years, its years are often numbered from the reign of Huangdi outside China. But at least three different years numbered 1 are now used by various scholars, making the year 2009 "Chinese Year" 4707, 4706, or 4646.

Mythology

According to tales and legends, the beginning of Chinese New Year started with the fight against a mythical beast called the Nian or "Year" in Chinese. Nian would come on the first day of New Year to devour livestock, crops, and even villagers, especially children. To protect themselves, the villagers would put food in front of their doors at the beginning of every year. It was believed that after the Nian ate the food they prepared, it wouldn’t attack any more people. One time, people saw that the Nian was scared away by a little child wearing red. The villagers then understood that the Nian was afraid of the color red. Hence, every time when the New Year was about to come, the villagers would hang red lanterns and red spring scrolls on windows and doors. People also used firecrackers to frighten away the Nian. From then on, the Nian never came to the village again. The Nian was eventually captured by Hongjun Laozu, an ancient Taoist monk. The Nian became Hongjun Laozu's mount.

Much much more background info on the wiki page!