Many people believe that during the Day of the Dead, it is easier for the souls of the departed to visit the living. People go to cemeteries to communicate with the souls of the departed, and build private altars, containing the favorite foods and beverages, as well as photos and memorabilia, of the departed. The intent is to encourage visits by the souls, so that the souls will hear the prayers and the comments of the living directed to them. Celebrations can take a humorous tone, as celebrants remember funny events and anecdotes about the departed.
You can read more at http://www.mexonline.com/daydead.htm.