Kotter comes from the '70s sitcom, Welcome Back, Kotter.  It refers to a process that sometimes triggers "Welcome back" bonuses in RR3.  You may also see this process referred to as "watching Kotter reruns", or being in "Gabe's class", which is a reference to Gabe Kaplan, the actor who portrayed Kotter.  A search of "Kotter" in the MRR forums will bring up many results, but perhaps the most comprehensive one is the Kotter Tutorial Video thread.