Kero-chan's true name is Kerberos, and he is the Beast Of The Seal (Fuuin no Kemono). He was created centuries ago by Clow Reed to guard the seal of The Clow, the book that holds the 52 magic Clow Cards. Hence, Kero-chan usually resides on the cover, where he appears in his true form.
Kerberos is a very powerful creature, with extensive knowledge about the Clow Cards and magical powers derived from the sun. However, when we first meet him, Kero-chan is in his smaller form: a kind of orange little stuffed lion cub with puffy wings and a fuzzy tail. We learn that because Kero-chan had been asleep (for 30 years ^^;), Sakura was able to accidentally break the seal of The Clow and allow all the cards to escape. Unfortunately for Kero-chan, as long as the Fiery and Earthy cards are scattered, he lacks his full magic powers and can't return to his true form.
In spite of this, Kero-chan still has some of his powers and can easily sense the presence of Clow Cards and of anyone who can use magic. He's also surprisingly strong for his size; for example, he can pick up Sakura using only his mighty set of little teeth.
Kero-chan has great confidence in Sakura's ability to seal the Clow Cards, so he immediately appoints her to be their new mistress, and it's his duty to help her capture them.
