Napoleon Dynamite is, at its core, a character study of the titular Napoleon. The movie deals with Napoleon and the supporting characters as people; the movie as a whole is relatively plotless, only tenuously connected by the story of Pedro's campaign for class president.
The characters in the movie are all regressing to earlier points in their life, refusing to grow up. Uncle Rico is obsessed with his glory days of high school football. Deb still sells lanyards to raise money. The grandmother still rides [=ATVs=] through sand dunes. Napoleon gets his jollies by playing tetherball and dragging an action figure behind the school bus as a younger child silently looks on. Everyone in the film refuses to act their age.
The impartial tone of the movie, in combination with the main character's childishness, lends credence to a critical interpretation that the film is mocking its characters. [[http://rogerebert.suntimes.com/apps/pbcs.dll/article?aid=/20040618/reviews/406180306/1023 Roger Ebert]], for example, took this view. In a good comedy, we should not laugh at characters, but with them. Napoleon Dynamite apparently fails on this level.
But another interpretation is possible. We can view the characters not as completely negative stereotypes but as flawed human beings. Napoleon is not a fully functional teenager, but he knows who he is and where he is going. He is not, perhaps, someone to be emulated. Other films will deal with likeable leading men and heroes. He can do whatever he wants. And, while we certainly hope to do better, perhaps there is some charm in life on the edges. "This is bad," the film seems to say, "but we could do worse." And that is perhaps the fundamental purpose of the movie: a good life can be found anywhere.
* I've heard some say, and taken this view as well, that we don't laugh at Napoleon cruelly but with pity because he's how we perceive ourselves. Who didn't feel as dorky as Napoleon at some point in their high school? His awkwardness is exaggerated, but so that we can recognize it as a trait and remember our own. And at the end of the film he learns to accept himself, and even use his dorkiness to save the day.