Ok, so what happened over in Japan recently to spawn all these new Popotan parodies?

They discovered caramelldansen.

So then is it a Popotan parody or a caramelldansen parody? Or both?

Well, went looking for the original Popotan .gif and found post #113333 which has Popotan and the song (11 months ago...) Anyway, it's definitely a Popotan parody, regardless of what spurred the current wave.

Well the first thing to put Popotan and Caramelldansen together was an AMV made by chiikaboom in October 2007 or so.
Someone took out the part that plays during the chorus (which happened to be Popotan) and Nico exploded.

I'm quite sure the popotan + caramelldansen flash is older than October 2007.

Indeed, it's been uploaded here towards the end of Feb. 2007, and it's been an old thing by then. So whatever your theory is, it's incorrect.

And I fully share jxh2154's WTF over that, I can't believe Japon hasn't discovered that flash during all that time until now.

Is there a reason for (the incorrect) "caramel_dansen" and (the correct) "caramelldansen" tags to coexist?

Yes. The green part of http://danbooru.donmai.us/tag_alias

Hrm, perhaps the flash and gif are old, but Japan most likely didn't see the flash first; they probably saw the AMV first as it was on niconico a while back.

Heck, if you track the earliest seen upload of the video, and then start looking at the movie rankings directly after, parodies only start appearing after the initial vid shows up...and then it quickly goes out of control.