Hackmaster is based upon 1e AD&D
First of, HackMaster is based upon the first edition of AD&D - not the second. It also includes some elements which seem to me to have been things which were discarded from OD&D, but I could be wrong about that. It's an officially licenced product, Kenzer & Company have a licence to use the AD&D intellectual property from Wizards of the Coast, but that license stipulates that the rulebooks must be somewhat parodic in nature
It has a very old-school feel to it, and as Topher has noted, it is not just a regurgitated version of 1e. It has something to bring to the table which is new. The crits system is awe-inspiring. If you're a DM/GM of any stripe, I urge you to read the material on crits and critical fumbles if nothing else. I would also urge you to read the chapter on Sidekicks, Proteges, Henchmen and other followers - that's something that the OOP editions of D&D used to focus on, but is not built into 3.5e D&D.
In Hackmaster, there is also a simple sytem called penetration, which basically means that on damage rolls, if you roll the max for that dice (ie: 8 on 1d8) it "penetrates" and you roll again, adding the result -1. To compensate for this, at first level, HPs recieve a 20hp "Kicker" - it may sound munchkinesque, but if it were not there, first level monsters and PCs would die intantaneously, a lot of the time, due to the somewhat higher level of damage that HackMaster characters and monsters do at low levels.
This tendancy evens out rapidly, of course, since HM goes by the hard-as-nails 1e progression tables, rather than the somewhat more rapid progression tables of 3.5e. Please don't think I'm flaming 3.5e D&D by stating this fact, it is not my opinion, it can be proved by referring to your books.
With regard to the quirks and flaws system, the way that works is that if a character takes on a "major physical flaw" for example, during character creation, they recieve a number of "build points" which they can use to increase their basic stats. The thing to bear in mind is that many of these flaws are potentially character-breaking, and it is the job of the GM to make sure that a player is forced to accurately role-play the defects that they have selected. It is not an open invitation to power-game.
Why would anyone take on the worst of these flaws, you ask? Because you get more building points for rolling percentile dice to determine which flaws you will possess. You can reroll, of course, but that costs building points. HackMaster character creation is an art form in its own right. It is also possible that certain injuries or spell effects may cause a character to recieve flaws in the course of a game. For example, a particularly severe crit may, in some cases, sever a limb, with the attendant penalties which the flaw in question carries.
How serious is the game? It's as serious as you make it. It's understood by the people I play with that silly jokes are not what we belly-up to the table for. Fortunately, most of the silliiness in the rulebooks is not the sort of thing that makes itself noticeable at the table, and we just leave out those rules. We play a serious (but fun) game of HackMaster. Jokes just don't come into it, really. It's a hardcore version of D&D, and that's why we like it.