Yes, The Onion Movie was a big let down. But, after reading through the history of the movie's release and all interviews regarding it, I can safely place most of the blame on 20th Century Fox. After all, it'd be unfair to expect a quality effort from a straight to DVD release that wasn't supposed to be released in the first place. It was Fox's decision to preemptively ship this straight to retail shelves against the wishes of the film's original writers, directors, and producers. Nice.
The movie does have its moments and can be funny at times, as demonstrated by the Armed Gun Man who simply wants a full-time job or the Unknown Stereotypes piece which explains that black people love taffy and the Irish have big nipples (just watch it). But the way in which it's pieced together just didn't work for me. A lot of the film feels rushed and scrambled together and probably would've worked better as a few articles strewn together on the website as opposed to a full-length movie. I'm sure with all the re-writes and re-shoots the original minds wanted it could've been a lot better.
You should still find a way to watch this if The Onion makes you laugh, just make sure you rent or download it before you buy it as a Christmas present to yourself.
And here's to hoping the guys at theonion.com just keep their video section updated and scrap all thoughts of a full-length movie for now.