The Cow in a Jar is a genius invention based on the Milk Jar.
Inside is a tiny cow that will continuously produce milk over time.
Check the Cooking Table for more information on Multiblock Kitchens.
If the above image is not clear enough, I've also made a short instructional video visualizing the process.
Right-click with a bucket of milk to put milk into the milk jar. Right-click with an empty bucket to take it back out.
Drop an anvil block on a cow above a milk jar.