A major component of Gram-negative bacterial cell walls. There is no lipopolysaccharide in Gram-positive bacteria.
Inappropriate response to lipopolysaccharide (or LPS) by the immune system leads to toxic shock syndrome.
It's chemical structure is implied by the name - it has lipid and sugar components. The lipids in LPS is variable and determined by the bacteria that is making it. There is a conserved core called lipid A which is found in nearly all lipopolysaccharides.
In vertebrates, it is detected by a multimolecular complex comprised of the receptor TLR4 (one of the Toll-like Receptors), co-receptors CD14 and MD-2, and the serum protein LBP, or LPS Binding Protein. Unsurprisingly, this complex recognizes the conserved lipid A portion of the LPS molecule, allowing it to recognize LPS from a wide variety of bacterial species.
Some variant LPS molecules are recognized by TLR2.