It's like Pokemon, in that you can level up, but you can also make your own Pokemon by dicking around and equipping new parts. I made a giant fatass. He pwns.
You can recruit little spore creatures to help you fight. Up to two. If you want, you can kill them and eat them to restore health.
There's a story, it involves you on a quest for revenge when a spaceship steals your little buddy - Little Oogie