Shaquille O'Neal and Dr. Phil wake up chained in a bathroom (spoofing Saw). Shaq has to make a free throw with a huge rock in order to get the saw down to cut off their legs (spoofing Shaq's famous difficulties at the free-throw line). Shaq and Dr. Phil have only two minutes to free themselves of their leg braces before dying from the room's airborne nerve gas. Finally, Shaq makes the basket and lowers the saws down. Dr. Phil ends up sawing off the wrong foot, thereby remaining chained and the two are presumed to be dead.
Tom Logan (Charlie Sheen), spoofing Bill Pullman's character from The Grudge, wakes up. There are three girls (from The Girls Next Door on E!) in his bed who later have a pillow fight. He tries to kill himself by taking too many sleeping pills but the pills turn out to be Viagra, resulting in him tumbling over a balustrade, landing on his erect penis, and dying. Cindy Campbell goes to get a new job (parodying Sarah Michelle Gellar's character in The Grudge). She's been asked to be a caretaker for the creepy "Grudge House." She receives a tour inside, Cindy expects nothing and she gets a 'feeling of evil' as the guide tries to hide the overflowing hair on the ceiling, in drawers and baskets and on his head; and The Grudge Boy in the bathtub by pushing him down with a plunger, and then walks out naked and Cindy smiles and says "I'll take it".
Meanwhile, Cindy's neighbour Tom Ryan (Craig Bierko), spoofing Tom Cruise's character in War of the Worlds, gets fired from his job as a crane operator at the docks. At a bar afterwards he runs into Mahalik (Anthony Anderson) and CJ (Kevin Hart) where it is revealed, in a parody of Brokeback Mountain, that the two have started a homosexual relationship. Tom gets home, where his ex-wife (Molly Shannon) has just arrived with his children, Robbie and Rachel, who both resent him. Cindy's job is to look after the incapacitated Mrs. Norris (Cloris Leachman), however she is incompetent at it, to the point of accidentally sponge bathing Mrs. Norris with her own urine. Throughout the night Cindy notices strange events going on in the house, culminating in her finding a ghostly boy in the attic.
The next morning she confides in Tom about the events of the previous night, which leads to a conversation about their past relationships. Cindy has a flashback to her first marriage, showing a big African-American man cussing her out, and then another to her second marriage, to the death of her husband George (Simon Rex) where, in a parody of Million Dollar Baby, George trips and breaks his neck (as do numerous members of the audience) during a boxing match between Cindy and Tiffany Stone, a female version of Mike Tyson also showing a pile of bitten-off ears. As they share a kiss, the sky suddenly goes stormy and everything electrical stops working (In the real movie cars stopped working, but in this movie cars, bicycles, skateboards and a man runs out of a toilet, trousers down and holding a newspaper ("My bowels have stopped moving!"). Tom goes to investigate, and discovers the world has come under attack by gigantic triPods (giant iPods) that play 80s music... and then switches to the "Destroy Humanity" playlist, transforming the iPods into actual Tripods, which vaporize the humans they zap (it was also showed three people which seemed to be rappers, get vaporized and dropping a huge pile of bling-blings).
Cindy runs back into her house and finds the ghost boy again. They began talking in "Japanese" (actually Japanese brand names and "buzz words" such as Sony, Mitsubishi, and Fujitsu), in what may be a parody of the scene between Beatrix Kiddo and Pai Mei in Kill Bill in which Pai Mei says "Your Japanese is lousy. It dishonors my ears.", which the ghost boy says to Cindy. She is told by the ghost boy that she can find the answer to the alien attack when she finds his father. He gives her directions to his location but Cindy couldn't read them so they transformed into a Yahoo map so that Cindy could read it. Tom splits up with Cindy and flees with his kids. Cindy runs into Brenda Meeks (Regina Hall), who apparently faked her death in Scary Movie 3, and together they manage to find the last working car and follow the directions of the ghost boy.
The scene then changes to the President of the United States being informed that aliens are attacking. President Baxter Harris (Leslie Nielsen) is sitting in Edna R. Penhall Elementary School, listening to a book being read (something about a duck); when his aide Jamison (Alonzo Bodden) comes, he sits motionless, wanting to hear the rest of the story. This mirrors George W. Bush's being read a children's story for seven minutes, after being told about the September 11 attacks. At an emergency session of the UN, and a round of horribly inappropriate jokes, President Harris reveals a weapon made to combat the aliens. Scientists have taken the lasers used by the TriPods, which kill the people but leave their clothes behind, and modified it to do the opposite to the aliens. The members of the UN get an unexpected, and quite unwelcome, demonstration when President Harris accidentally hits the switch and is soon standing in front of all the delegates, completely unaware that he is totally naked. Its not long before the entire UN is stark naked. Baxter's aide Harper (Bryan Callen) tells Baxter that he's naked too where Baxter thinks that he was wearing a wrinkly leather coat. Harper escorts the President out of the UN.
Cindy and Brenda come across a village that is a hundred years behind modern times. After unsuccessfully trying to steal clothes off some villagers, they take some from a laundry basket and attempt to fit in. Unfortunately, they are captured and are taken into a court to decide their fate. Henry Hale (Bill Pullman), the head of the village, rules that Cindy and Brenda may stay in the village, but they may never leave.
Tom and his children run into a battle between the Army and triPods. Robbie decides to join the fight, excited by the graphic violence. While Tom tries to dissuade him, Michael Jackson (who has gathered a bunch of children) tries to persuade Rachel to come with him, but Tom manages to stop her in time. Unfortunately, Robbie gets away. Jackson is zapped by the triPod's heat ray; the first blast causes him to revert to his Bad appearance, the second into his Thriller appearance, and the third reveals his true form - a balding middle-aged black man - before a fourth blast destroys him totally, leaving only his nose. Tom and his daughter flee into house protected by Oliver (Michael Madsen), parodying Tim Robbins' character from War of the Worlds, who is telling them that they should make their own tripods ("Ours will have FOUR legs").
That night, the village is attacked by Those We Don't Speak Of, however it is discovered that they are simply villagers in costumes. Next door, Henry is stabbed by the mentally challenged Ezekiel (Chris Elliott). Henry reveals to Cindy and Brenda that he is the father of the ghost boy, who was killed at Cindy's boxing match because everyone snapped their necks and Don King crushed him. He tells Cindy that only she has the power to defeat the triPods. At that point, Cindy and Brenda get captured by a triPod, as do Tom and Rachel.
The characters wake up in the bathroom from Saw. Cindy and Brenda are wearing the "Venus Fly Trap" from Saw II and Tom is wearing a device that would shoot a large dildo into his anus. Jigsaw appears on a monitor on the wall, and tells them they have 60 seconds to get the Venus Fly Traps off before they close. Eventually, Cindy figures out (after much prompting) that she has to get the key from behind her eye, which she does with ease, because the key was behind a glass eye she got due to a "bad bar fight in '96". Cindy frees them from their traps, and Tom's kids come down from the ceiling, about to be sliced into bits unless he holds onto a rope which happens to be between an iron maiden. He grabs onto the rope which leaves him open to another torture device called the Nut Cracker, which gives him various punishments such as kicking his crotch, and giving him a purple nurple and a wet willy. Moments before their deaths, Cindy finds photos in the toilet of Jigsaw, a woman, and the ghost boy, and realizes that Jigsaw was the ghost boy's real father, and the entire invasion was revenge for his son's death. He then says "Anyone can hold a grudge, but it takes real courage to forgive," and it is at this time that Jigsaw comes into the spotlight. He then tells them that the invasion is over and allows them to leave.
He apologizes for the invasion and killing millions of people, and then Brenda (who went through a rotating wall into the control room earlier) and Jigsaw's brother, Zoltar, emerge from the other room, where they have just had sex. Jigsaw asks Zoltar if he caught anything, Zoltar replies that Brenda (untruthfully) told him she was a virgin and Jigsaw finishes by saying "We are so fucked." Nine months later, Brenda gives birth to a baby that looks just like Jigsaw and Zoltar.
After that, James Earl Jones gets hit by a bus (which may be referring to what happened to Terry in Final Destination) while delivering Morgan Freeman's closing lines from War of the Worlds.
A five minute epilogue spoofs the Tom Cruise couch incident by showing an Oprah Winfrey Show episode with Tom Ryan jumping on a couch with Oprah (played by Debra Wilson). Tom runs around the studio, does backflips (performed by David Leighton), swings across the studio, and chews/rips apart one of the couch cushions. Cindy Campbell walks in and gets thrown by Tom off the stage. Tom then breaks Oprah's hands and wrists, smashes a chair over her head, runs towards the camera lens, and the screen goes black.