Simply swearing a lot does not make something funny, but thankfully the AVGN is generally a well written and well produced "show". A lot of his observations are very clever, and being an aspiring filmmaker myself, I can appreciate the effort he puts into editing his clips. The montages, the "host segments", and the funny use of repetition (see the Silver Surfer episode for a great example) all make for a pretty original show.
I also enjoy that he is in character as it makes it more than a simple review, but rather a showcase of acting talent. It's also evident that James really knows his pop culture and I'm always impressed by his references and general movie/game knowledge. The only downside? I'm not a huge fan of most of the over-the-top "guest appearances". Some are fun, but recently they've taken up too much time when I'd rather see him picking apart crappy games.