You can see why John Waters calls this his "satire of a Woody Allen movie." His take on the New York art market is of a self-obsessed, facile little world populated by frauds and poseurs, whereas his beloved Baltimore is a lovingly rendered small town peopled with eccentrics. Waters loves society's low-lights. Better, the film says, we hang out with the rough-trade downtown than any up-market Manhattan gallery luvvies.

Pecker (Edward Furlong) takes photographs. Using the broken camera given him by his thrift-store proprietor mother he documents the city where he lives with his colourfully dysfunctional family. This is point and click artistry, but Pecker (so-called because he used to peck at his food as a kid) and his Laundromat-owning girlfriend Shelley (the scary Christina Ricci) are not the only ones who see genius. The intervention of Lili Taylor's heavyweight dealer soon sees the ingenue and his snatched black and white portraits the toast of the New York cognoscenti.

This is a sort of art world Beverly Hillbillies, then, a corn-fed homily to Pecker's realisation that there really is no place like home. But then it's the bang-up details, as always, that dictate Waters' comedy, and they buff-up here pin-sharp: Pecker's sugar-addict sister (the terrifying Lauren Hulsey) snorting peas through a $10 roll-up; rat's shagging in a dustbin; teabagging (don't ask); the customer having sex with Shelley's washer; Waters himself as a lecherous phonecaller, slavering the word "vagina". Art is everywhere and, as Pecker says, "life is nothing if you're not obsessed."

Waters draws his characters with genuine wit and affection. Like Pecker's grandmother and her hysterical talking statue of the Virgin Mary, sister Tina (Martha Plimpton) who MCs in a riotous gay bar, and Pecker's bar-owing father (Mark Joy), much given to criticising the new lesbian strip joint opposite. "Pubic hair," he announces gravely, "causes crime."

If Waters is in love with anyone, though, it's surely the wonderful "stain goddess" Shelley, his bitch queen of the dirty undies. Tartily sexy, rigorous with her rulebook and obsessive over new cleaning products, she's one of his finest creations. "Get out," she cries banning one poor patron from the Spin'n'Grin, "and take your tired wardrobe with you." Ricci is the strangest and best young actress in America.

And yet, Pecker is just about the warmest, most gentle comedy you could happen upon. "The end of irony!" someone cries at the close. Waters is lampooning rather than attacking, icing his cake with star cameos from artist Cindy Sherman and celeb-photographer Greg Gorman. There's no bitterness, just a familiar fascination with the oddball and the ordinary. (Try and see the US DVD if you can - Waters' commentary is almost better than the film itself.) It's not as loud and flat-out nasty as Pink Flamingos (pale-imitators the Farrelly brothers get a free run these days), nor as family friendly as the breakthrough Hairspray. But after a difficult few years Waters seems to have finally found his niche again: tart bad taste and gratuitous "beaver" shots. And we love him for it.