Ever since I saw this episode when it first aired, this has always been one of the favorite episode of ST:TNG. Now, when I was younger, I don't think I got a lot of the humor, but now when I watch it I laugh my head off. The plot is fairly clever and it's always hilarious when we see the members of the Enterprise try to interact with obsolete technology.
The plot revolves around Riker, Worf, and Data become trapped in a sort of simulation based off a "second rate" novel that is set in a 1920's gangster era hotel/casino. The characters they interact with are caricatures and I think the actors and actresses playing them have a good time with that. It's obvious that the writers had a fun time making the most cliché'd version of the hotel that they possibly could. For example, there's a rich Texan playing blackjack and loudly giving advice to anyone who will listen, because there's ALWAYS a rich Texan acting just like that in these kind of novels. There's a gangster named (of course) "Mickey D". And when we find out the opening line of the novel is "It was a dark and stormy night" we know it's probably even worse then we can imagine.