My wife & I went last year, and it was one of the best experiences we had at WDW! During the night, they will usher people into different rooms to watch different skits (the schedule is posted in the lobby area), and most of the characters will be in the room where the skit is taking place. Usually characters not involved in the skit will hang out in the lobby area to interact with the new guests that arrive while the skit is going on (from the times we went, once the skit starts, they close the door to the room and it stays closed until the end of the skit).
There is a lot of adult humor, but it is usually worded so that children wont pick up on it. The skits have the same plot from one night to another, but there is enough improv to make it a different experience. We visited the club twice (2 different nights) during our last stay, and it was cool to see the actors taking on different roles than they did the previous night.
I cant say enough great things about this place, and would highly recommend it!
As for the Kungaloosh, that was our drink of choice there. Very tasty!