We can laugh at comedies like this for two reasons: Because we feel superior to the characters, or because we pity or like them. I do not much like laughing down at people, which is why the comedies of Adam Sandler make me squirmy (most people, I know, laugh because they like him). In the case of Napoleon Dynamite, I certainly don't like him, but then the movie makes no attempt to make him likable. Truth is, it doesn't even try to be a comedy. It tells his story and we are supposed to laugh because we find humor the movie pretends it doesn't know about.
One-and-a-half star review
Review of Napoleon Dynamite (18 June 2004)