There was a rumor at one time that he was in an accident and suffered brain damage, and that prior to the accident he was a legitimate rapper...or at least as legitimate as most white rappers can be.
However, I think that rumor was proven false, and the reality is that he's actually pretty good (and not partially retarded), but has chosen to do these absurd raps in character as his schtick.
I'm still not sure, because if he is acting, he does a fucking fantastic job.