The Coil pack sits just behind the engine, where the spark plugs connect to and get their power from. If you want a more technical description Google is your best man
Apparently it is a weak link on the MX5, especially the Mk2 i.e. 99 and 00, not sure about the Mk2.5
Basically when it starts to go one side of the pack stops working intermittently. The pack is in 2 halves, 1 half controls 2 and 3 and the other controls 1 and 4 cylinders. So when you start the engine only 2 cylinders are working, you can hear the difference straight away. Plus it sends too much petrol to the engine which can damage the Cat, and can even make the cat explode, apparently Steve has witnessed personally.
It starts to happen usually around the 60k mark, and only appears during a warm start, i.e. you pop down the shops, then come out and find the car won't fire properly. If you leave the engine ticking over it usually sorts itself out within 1 to 15 mins. Very annoying and you begin to loose trust with the car.
Mine has been going for over a year now but when I finally bought the part in the US, they sent the 1.8 version as that's all they seem to stock in the states.