This is a term used to describe the position of a pitcher's arms as he picks up the baseball during the cocking phase of a pitch.
In the Inverted W, the pitcher picks up both of his elbows above his shoulders. Each arm resembles an upside-down 'V', so it is called an inverted 'W'.
Some people have asked why it isn't called an inverted 'M'. This is not just a font-based issue. The key here is not the 'W,' it is the inverted position of the arm. The 'W' is just a method of describing the inversion. Simply calling this an 'M' does not do justice to the inversion of the arm in this and similar positions.
Some examples are below. Visit Chris O'Leary's Death to the Inverted W for more information.