Taken from Wikipedia:
Otto, who is of German descent, is notable for his maniacal driving style (which, along with never getting a driver's license, cost him his job on the season three episode "The Otto Show"), his love of heavy metal music, and his propensity for sounding and acting like a perpetual 1980s teenager. He also has a habit of describing things as "gnarly".
He has been seen at Alcoholics Anonymous meetings: "My name is Otto, and I love to get blotto!" He is a stoner as well (he smokes with Homer in "Weekend at Burnsie's", had a joint with him on "Strong Arms of the Ma", and smoked a bong in The Simpsons Movie). It has also been implied that Otto used other drugs like heroin and LSD (in "Homerpalooza", during Peter Frampton's show, he sees his shoes talking to him; in "The Seven-Beer Snitch", Otto's urine sample was so loaded with illegal substances that the inside of it looked like a scene from the cartoon Yellow Submarine). His openness towards substances is also demonstrated in the new HD intro, in which Otto ingests the presumably radioactive coil that Homer tosses out from work.
In the episode "Homer Defined" he states that he has a brother, who married his "old lady." In the episode "The Otto Show" it is revealed that he can play the guitar very skillfully and he says that is all he did in high school. He is often homeless, having been evicted from his apartment and forced to live with the Simpsons in "The Otto Show", and found squatting in the Simpsons' recently-vacated home in "You Only Move Twice". It is also implied that he sleeps in the school bus on several occasions. His worldly possessions are (or were) nothing more than the clothes on his back, a couple of old 'cycle magazines and a jar of mustard. In the commentary for "Bart the Daredevil", it is revealed that the writers planned to name him "Otto Mechanic", but the joke never appeared in an episode. To add to his typical teenager-like attitude, Otto never gives any rules, such as saying as children were boarding the bus, "Hey, quit shoving! Nah, I'm just kidding, you can shove all you want!" According to the episode "The Mook, the Chef, the Wife and Her Homer", Otto was in the same third grade class as Kearney, implying that, much like Kearney, Otto is actually older than he looks and acts, this is further explorated (and exaggerated) in The President Wore Pearls, where it is suggested that he is even older than Krusty the Clown. His name is a joke on the Ottoman Empire's name, as well as Bart's tendency to greet him with "Otto, man!" His look is based on former Simpsons writer Wallace Wolodarsky. In the episode "It's A Mad, Mad, Mad, Mad Marge", when Otto puts on a top hat to propose to his girlfriend, Becky, he looks similar to Velvet Revolver and former Guns N' Roses guitarist Slash; this could well be intentional, due to Otto's love for rock music. There may also be some reference to Jim Morrison of The Doors as well, given that both have/had a father who is a high ranking officer in the United States Navy. According to A Complete Guide To Our Favorite Family, it says that his favorite songs are "Free Bird" by Lynyrd Skynyrd, "Purple Haze" by The Jimi Hendrix Experience, "Frankenstein" by the Edgar Winter Group, and "Iron Man" by Black Sabbath