This is the stuff that carries nutrients, such as proteins, glucose, urea, and salts throughout your CNS. It also serves to protect certain parts of the CNS. It circulates mainly through the four ventricles of your brain, and in the spinal cord's canals. The average human adult has between 80 and 150 ml (3 to 5 oz.) of CSF at any given time. It is clear and colorless, and liquid at room temperature. I believe (unfortunately I can't double check as it's not in my book, I learned this from my doctor), that we produce about 200 cc of CSF per hour. It is formed by filtration and secretion from choriod plexuses, specialized capillaries in the ventricles. It circulates continually. It is gradually absorbed into veins (normally as rapidly as it is formed). An obstruction or inflammation causes CSF to accumulate in the ventricles; this condition is called hydrocephalus and can cause pressure on the brain which results in brain damage. Inserting a shunt into the ventricles to drain off excess fluid is used to treat this condition.
To remove CSF to do a cerebrospinal fluid study is done via a procedure called a spinal tap. A long, thin needle is inserted between the 3rd and 4th lumbar vertabrae, through which CSF can drip. Usually, 3 3 to 4 cc samples are taken, although your doctor may want to take more. Despite popular myth, it doesn't really hurt much (I've had one), and you only have to lay on your back for about an hour afterwards and lie still.

Sources: Introduction to the Human Body: the Essentials of Anatomy and Physiology, 4th ed., along with many, many visits to my neurologist :)