According to Wikipedia, "In American folklore, a rabbit's foot is carried as an amulet believed to bring good luck."
They discover that Bobby knew something about this item - he says that it was created by a conjure woman in Baton Rouge 100 years ago, and is a cursed object more than a lucky charm. Once you touch it, as long as you still have it, you have exceedingly good luck. Once you lose it, you have exceedingly bad luck, and usually die within several days.
The foot is created by cutting it off a rabbit in a cemetery, under a full moon, on a Friday the 13th. The curse can be broken by destroying the rabbit's foot - the ritual involves burning it in a cemetery with bone ash and cayenne pepper.