You might be interested in my answer to a similar question here.

In brief, there's more than one way to "win" a war. You can win a war by defeating your opponents outright on the field of battle, securing the surrender of their forces, etc. You can also "win" a war by demonstrating that you can impose unacceptable losses on your opponent and convincing thus convincing them to cut some kind of a bargain with you.

The Iraqis were hoping for the second option. The Iraqi plan was to slow down the American advance, impose heavy casualties, and then negotiate. It's also worth noting that while there was a large "coalition," everyone understood that this was really about the United States. Saddam viewed the Americans as very casualty-averse and thought he could kill enough U.S. soldiers that President Bush would back down and negotiate.

Saddam said on the eve of war:

I do not belittle you. But I hold this view by looking at the geography and nature of American society into account. Yours is a society which cannot accept 10,000 dead in one battle.

So, the design was to find a way to impose losses at that level and then count on the United States looking for a compromise. If anything, Saddam actually overestimated U.S. willingness to take losses. Bush judged that 10,000 casualties (dead + wounded rather than just dead) would be politically unacceptable.

In point of fact, the coalition suffered about 1,000 casualties, so you might think Saddam was crazy for thinking that he could impose 10,000, but it wasn't just Saddam who thought this. The U.S. military also thought, based on their initial plan, that the U.S. was likely to take 10,000 casualties as did outside military analysts (who estimated in the 10-20,000 range).

U.S. casualties ended up coming in so low largely because of Schwarzkopf's inventive "left hook" strategy that flanked the Iraqi and took them by surprise allowing the easy victory that we all remember. Both sides also seem to have somewhat underestimated the American technological edge in advance. But the bottom line is that Saddam believed quite reasonably that he could impose unacceptable losses and force the Americans to negotiate.