It's hard to believed it's taken me this long to watch this show. It's considered a classic in the world of anime because it defines what it means to be an otaku (i.e., fanatical anime fan). It is one of the earlier productions of Gainax who themselves started out as just a group of fans, so if anyone has the credentials to make this kind of show it's them. Now that I've finally seen it, I definitely have to agree that it deserves to be called a classic because it does such an effective job of showing the reality -- and un-reality of the otaku culture.
The show is made up of two episodes, each of which alternates between anime and live-action.
The anime tells the story of Kubo, a normal college student who gets caught up in the world of anime, toy modeling, and everything in between. It starts out with a chance meeting with an old high school buddy who introduces Kubo to the world of anime. At first Kubo is enthralled by a sense of nostalgia for shows from his childhood; but gradually the hobby takes up more and more of his time until his social life is all but eradicated. When even his girlfriend betrays him, Kubo decides that he must show the world the true power of the otaku by becoming the ultimate otaku, or OTAKING!
One of the things that fans will get a kick out of is all of the references that are scattered throughout the show. You have everything from Macross and Gundam to some Gainax originals like Nadia, Honneamise, and Daicon 4. In fact, most of the references are so iconic that the show could act as a test for your level of anime fandom -- the more names you can recognize the bigger otaku you are.
The anime is broken up by a series of live-action interviews in a mock documentary titled "A Portrait of an Otaku". The interviewees include different breeds of otaku. There's the anime collector who records every show but never watches the tapes, the former cosplayer who denies ever having worn a costume even when faced with photographic evidence, and even an American who moved to Japan because of his fascination with Japanese pop culture. The interviewees' faces and voices are masked to "protect" their identities (in reality the parts are played by actual Gainax staff members) because they tend to take part in all kinds of unsavory activities. There's a porn fan who is trying to develop glasses to defeat the mosaic censoring on a video, a computer gamer obsessed with hentei, and a "cell thief" who steals animation cells from production studios and sells them on the street (that's a new one to me). All in all, it's definitely not a display of the otaku's finest hour.
Now, I'm not the greatest analytical mind (not that that's ever stopped me before) but I think that the two contrasting mediums -- anime and live action -- are supposed to show two contrasting perspectives of otaku. The anime shows how otaku want to see themselves -- like achieving vindication over those who mock them, and ultimately living the fantasy that they surround themselves with. The "Portrait of an Otaku" part, on the other hand, shows how the rest of the world sees them -- mainly as socially detached and isolated loners who single-mindedly obsess over what should really just be a hobby. It's a distinction that becomes more and more apparent the further you get into the show, as the rift between the optimism of the anime and the reality of the interviews becomes wider.
I've see some reviews call this show called a "call to arms for all otaku", but I think those reviewers are missing the point because the show is actually mocking anime fans (self-mockery, but mockery nonetheless). So much so that while watching it I found myself unconsciously thinking, "wait, I'm not like that... am I?" And in truth that may be the real genius behind this show. Anything that can make someone take a look at and question themselves has to have something going for it. The only downside is that since it is making fun of its audience, the amount of empathy it builds for its characters is limited. Don't get me wrong, this show is endlessly entertaining, but it's more so on an academic level than a cathartic one.
Overall though, I think this is something that any anime fan could and probably should watch. Despite the satirical edge, it really is a fun show to watch and deserves its standing as an anime classic.