A serial killer stalks the nursery rhyme characters of Toy City, leaving hollow chocolate bunnies at the scene of the crime to taunt the police; Jack (a boy who has come to the city to seek his fortune) and Eddie (an alcoholic teddy bear with a corroborative noun problem) have taken it upon themselves to use their detective skills to apprehend the killer. Wacky hijinks and apocalyptic prophecies ensue.
I think the first chapter is a remarkably good barometer for whether or not you will enjoy the rest of the book - read it before you take it off of somebody's hands. This is a novel written by a clever author with clever characters who aren't afraid to take some time out and be clever for the audience, in a manner similar to Douglas Adams. Some people will find this endearing, and some people will find it to be juvenile crap. I love that sort of thing when it is done well, and this is done well.
As I was explaining it to sinister_dr_x : it's like a series of hilariously enjoyable ball-yanks through a fanciful world of nursery rhyme celebrity and debauchery. Okay, I added that last bit just now, but you get the idea.