Pretty much this. Banjo and Kazooie are all fat and shit now and are visited by Grunty. Who survived.
Again.
They are about to Duke it out when LOG, the Lord of Gaming, comes out and tells them how much they suck. After some antics he transports you to Shdowdown Town, where all of the characters from the Banjo series live. The town is your platforming area of the game, trying to get you around and see new heights and explore Banjo nostalgia and lots of secrets. You find Jinjo's and rescue them from being wrongly extradited for being confused as Minjo's.
The main focus of the game, however, is the different video game worlds that Showdown town is linked to.
You must obtain Jiggies to get into these new video game worlds which star your lovable Banjo characters like Klungo, Mumbo, and Humba with many others. The main points of the missions are to create vehicles and complete the missions, almost like LEGO's. Some are already pre-made for you and some require your imagination.
http://www.youtube.com/watch?v=fFQGwGGsh3A
Some missions are races, some ask you to throw away trash the size of the Himalayan mountains, some ask you to lauch your car as far ass possible, some ask you to beat the shit out of bottles.
Fuck Bottles.
Earning more Jiggies unlocks more video game areas including the awesome BanjoLand, which takes the worlds of Kazooie and Tooie and makes them into an amusement park where you can go around and read up on the lore of Banjo. Best area in the game, IMO.
And if you're just plain bored, leave the designs to your imagination and make something awesome.
http://www.youtube.com/watch?v=PM-AwhtAdOk