It doesn't look like CoffeeScript, it is CoffeeScript, and it does compile to JavaScript.
`: do ->` is idiomatic CoffeeScript to set a complex value inside an object literal; it compiles to `: (function () {...})()`. The output of that file is a JavaScript object which is translated into CSS by the library.
This might be preferable to raw CSS or LESS/Sass if you want to write more complex CSS generation code in the same language as the rest of your stack, especially if you want to integrate your CSS with the rest of your app somehow.
I'm a big fan of the idea in the abstract, although I'm not sure I love this implementation.