Alpacas are a member of the South American Camelid family, along with Llama, Vicuna, and Guanaco. Peru is the most famous of countries that alpacas are native to, but alpacas also come from Bolivia, Chile and other South American countries (those explicitly listed are the only counties that recognized imports to the USA came from).
Alpacas and Llamas have long been domesticated, originally by the Inca who considered the alpaca fiber the fiber of the gods. The vicuna and guanaco are still wild animals, although the vicuna are rounded up periodically and shorn for their fiber.
Within the alpaca family there are two types:
Suri - The suri alpaca are the rarer type of alpaca, in the US as well as in South America. The fiber of a suri alpaca forms into locks and hangs down along the body, with a part down along the backbone. Suri alpaca fiber is prized for it's luster and silkiness. The luster of the suri fiber comes from its extrodinary smoothness. A high luster fleece can feel cool and damp even with it's totaly try on a hot day.
Huacaya - Huacaya are usually what peolpe thing of when they think of alpaca. The huacaya fleece looks like someone took a crimp tool to it, giving it lots of small waves. This crimp makes for a much lofter yarn when the fiber is spun into a yarn. There are varing degrees of 'crimpiness' in huacaya alpaca fiber, some have strong amplitude and frequency and others with barely any noticable crimp.
The two types of alpaca can interbreed and the cross will usually produce a suri. It is possible for two suris to breed and produce a huacaya. The full alpaca genome is not yet decoded, but the suri acts like a dominate gene with the huacaya being recessive. From a suri stand point it's prefered to work with suris that have no huacayas in their ancestry.
Both types of alpaca come in a wide variety of colors. In the US for showing purpose 16 colors are recognized, in Peru they recognize 22 different colors. The reality is, there is a very wide range of natural colors ranging from white to black. Both types of alpaca fiber is also very warm, several times warmer than sheeps wool.
The main use for the alpaca fiber is in production of clothing products like alpaca sweaters or alpaca socks. These items are extremely warm as well as durable and should last a very long time if well cared for.