This drops from level 50+ mobs. They can be bosses or regular mobs. It only drops during the Halloween event. I also believe they drop of any mob capable of dropping a 16 slot bag.
This item is a world-drop only during the Halloween event. It can drop anywhere from a lvl 50 undead in WPL to elite mobs in DM.
It is BoP, so it is a suitable replacement for other 16-slot bags which you can then move into bank slots or sell on AH since traveller's backpack doesn't bind.
The other upside is that I like the look of having a Jack-O-Lantern smiling at me from a bag slot. :-)
The first in-game "holiday" was Christmas, with the Grandfather Winter and the christmas trees all over the place, etc.
There was no special Halloween content last year the game wasn't released until November. 
To quote Blizzard's own press release:
"IRVINE, Calif. - November 4, 2004 - Blizzard Entertainment� today announced that its eagerly awaited massively multiplayer online role-playing game (MMORPG) World of Warcraft� will be in stores in North America on November 23, 2004...."
This item is new.  Noob.
EDIT:  To the confused, this discussion originally contained a TON of posts by ignorant people claiming these had dropped in beta from a fictional "Halloween Boss" and were old content.  The flame-war raged, but eventually it became clear that this item was NOT in beta.  Many of the original posts on both sides of the argument were deleted after the fact, which is probably for the best.
  To clarify, this item was introduced into the game in October of 2005, and did not exist before then.
Got one in UD Strat, and yes you'll never see this item drop again (until next Halloween, at least).  I used it for a bag slot until the end of Halloween, now it's a bank slot (replaced with a real backpack).
In about 4 hours of Tyr's Hand (over 2 days) I have seen 3 drop. I've won 2 of them, so I'm happy :) Thanks Blizzard for handing out free 16 slotters so generously lol
Had three drop on the same run in Scholo, I won two which completely outfitted my character with 16 slot bags. By the looks of it, I'd say it's a seasonal thing to coincide with Halloween.
There is appearently a random bug with these bags. Won one in Silithus (my 2nd one), but after equiping it in place of a runecloth bag, I joined a DM Tribute run. When I zoned into DM I noticed the Pumpkin bag was gone and the runecloth bag was reequiped. Also lost a Libram of Tenacity and some leather that was in the bag. Still waiting on response to an escallated petition.
Word to the wise dont put anything in one that you cant easily replace until they have fixed the random bug.
Won one on greed roll last night, dropped from a random spectre in Dire Maul west. I guess it's a world drop indeed, and I don't think it replaced the Traveler's Backpack.
seems to be a special drop during the event, probably preplacing travalers during this time, so its a worlddrop just the same. Damn, I want one of those, very nice addition to the other stuff you can get during Hallows End. Sure, its just the name and icon in the end, but still...
Just got one, dropped off of a mob in Scholomance.. Dunno if it drops in every highlevel instance now for two weeks or only in Scholomance. But Scholomance is the only place so far where I've heard them drop.
I was grinding on the cultists near nethergaarde when one of these dropped. Later they dropped a mithril lockbox with a traveler's backpack in it. This bag is never leaving, but, yeah, with they weren't bop.
Snagged one in AV off the General who near the Horde base. (His name escapes me.) Any ideas/thoughts on if after the holiday they revert back to normal bags? I hope not...