As an introduction, Borat (Sacha Baron Cohen) introduces his family and friends before making his way across to America. There he shows that the culture is very different and he becomes fixated with Pamela Anderson after seeing her on Baywatch.
He convinces his producer Azamat to go to California to meet Pamela under the guise that he wants to find out more about different parts of America.
Borat's success comes mostly from Sacha Baron Cohen's ability to fudge the line between fact and fiction. Many of the people in the film have been deliberately stitched up, causing them to have genuine reactions to some of the backwards behaviour that Borat displays. Naturally, many lawsuits have followed, which you can find on Wikipedia's extensive page.
Returning to the point in hand - what exactly can you say about a movie that offends 90% of the people that watch it? If you're in the 10%, you'll absolutely love it. If you don't then you're either Jewish, female, black, Muslim, Kazakh, homosexual, disabled or just too narrow-minded.
Sit back, open your mind, and please, please keep a towel nearby to clean up your split sides.