No, it's not a joke setting. I've found, over the course of reading multiple threads on multiple boards, that those people who call it a joke setting have never played. Some, to their credit, have at least looked through the books, but so many have just heard about the things you've mentioned above (gnome titans, groin stomps and all the rest) and regurgitate the rumor that the system is a joke.
The system is nothing more but the next evolution of 1e/2e D&D. The setting is most certainly light hearted, but when did that become such a bad thing? I kicked an NPC in the nuts long before I played Hackmaster so why is it such a detriment to the setting now?
Yes there are Hackmasters (which are artifacts) and sidewinder fireballs (which do piss poor damage) and Bouncing Bettys and flaws like male pattern baldness. But why is that such a horrible thing? Most people say "I've been gaming for over twenty years" so how come we can't laugh at the things that we've been doing for so long?
I value my Hackmaster games very much and I look forward to every Thursday night because of it. We talk, we haggle, we laugh, we fight, we kick ass just like any good D&D campaign.
If it's not to your liking, remove the quirks and flaws (an easy thing to do), grab your 1e PHB and use those spells and walla, you've got yourself a "serious" game. What I would suggest, is play a game or two of Hackmaster. Although the first time you make a character it is daunting, you are provided with a wealth of role playing opportunities at your finger tips that can spur your imagination in so many directions. You will be truly rewarded for your efforts.
And, as an example, here's what I knew about my character just from making him:
He's the oldest of four boys. Both his parents are alive but his father is abusive and dishonored the family. He's an alibino and has male pattern baldness (which for elves means they grow facial hair, not lose their hair, still a bit of a hassle in social dealings). I'm a self-absorbed glutton from a middle upper-class family. I have a penchant for losing my cool in combat and I'm color blind.
All that just from a roll of a dice. Oh sure, I like to make up my character background with my characters, but this character has been equally exciting because the dice made him and I've discovered his character proceeding from there. It's been a blast!
Basically, Hackmaster is not a joke. A joke has a punchline and a conclusion whereas Hackmaster has no end. It is just like any other RPG where you game until you're dead or part of history. You go and you go and you go and although you might have a few laughs along the way, you'll never get to a punchline.
