It can also very rarely be obtained from harvesting the corpses of plant mobs like Bog Lords in Outland. The chance to get a black lotus appears to increase with the monster's level, so chances are higher in places like Skettis, The Steamvault, Serpentshrine Cavern and heroic Coilfang Reservoir instances.
Each of the spawn zones has a small set of spawn points for Black Lotus. Only one Black Lotus will spawn at a time in the zone. Check sites which focus on gathering WoW data to see maps of the spawn locations. It's estimated that the respawn rate is 1 hour, possibly spawning on the hour.
The Black Lotus is probably either a reference to or inspired by Conan the Barbarian stories in which a highly venomous plant known as the Black Lotus first appeared. It could also be a reference to the card Black Lotus, from the Magic: the Gathering card game, in which the Black Lotus card is among the most useful and expensive cards in the game.
Patch changes
Patch 2.4.2 (2008-05-13): Black Lotus will now show up under the Herb subcategory in the auction house.
Patch 1.7.0 (13-Sep-2005): Black Lotus is no longer soulbound.