"The passion and parochialism around Irish rugby for these two provinces is without peer around the world, I would suggest."
Munster may have won the first meeting this season, but Matt O'Connor's Leinster side come into this weekend's match on a massive high having won each of their last nine games with a large Leinster contingent recently helping Ireland to Six Nations glory.
New Zealander Penney hailed the quality of Saturday night's opponents but insisted that his players will not be distracted by the notion of 'getting one over' on their opposite numbers.
"Leinster are a great side, they're full of internationals and that's the reality of it. Fixtures like this come around with a massive amount of emotional attachment and the last thing you want is to be overcooked.
"The sideshow of the players who want to play their way into Joe Schmidt's frame is a dangerous one because it takes guys onto an individual pathway that's not conducive to having a positive outcome for the team.
"There are challenges within the individual battles that guys need to step up for. The key thing is that they are focused on what's in the best interest of Munster and the best interest of their team-mates.
"At the end of that, hopefully they can look back with a lot of pride on a really good evening's performance and hopefully (it's) good enough to get the points. If it's not, at least they've done the right thing by the group and by the jersey."
Munster have a vital Heineken Cup quarter-final against Toulouse at Thomond Park following the trip to Dublin. However, the province are looking no further than Saturday night.
Penney added: "The Heineken Cup is important but so are local derbies. And this local derby has been added another dimension because of the position in the table of the two sides and because of the success of Leinster in recent years and I'd like to think that Munster have clawed back a little bit.
"We've got a long way to go and we still want to be as respected as Leinster are and as good as they are and to do that we have to put in the performance on the field."