The comic is written and illustrated by Matthew Robert Bowers. The illustrations, as you've no doubt noticed, are not drawings, but photographs. Matthew will write the scripts, then get his actors together and shoot them with his Canon Digital Rebel XT. He then takes the photos and modifies them in Photoshop, to give them a look that's not quite photograph and not quite drawing, either. The word balloons are added in Illustrator. The computer he uses to do all this, in case you're curious, is an iMac G5 with a (woefully insufficient) 1.8Ghz Power PC processor. He's helped greatly by his 6x11 Wacom Intuos3 pen tablet.
The story is based on a teleplay that Matthew wrote many years ago with his good friend Zack Sapunor. The original idea was for Hilarity Ensues (not it's name back then) to take place in Los Angeles, and be a television show. The core ideas and characters have survived the transition to Portland and webcomicdom, however, with some modifications.
Hilarity Ensues updates every Monday, Wednesday, and Friday.