Alright, here's the best explanation I can offer.

The original video came from the Japanese video sharing site Nico Nico Douga. I believe it was made for an annual 3D animation contest a few years back. The downhill drift race setting is almost certainly based on car racing anime/manga Initial D.

The two guys in their underwear are from a wrestling-style gay porn video starring Billy Herrington, which (I have no idea why) became a somewhat big internet meme in Japan.

The song in the background is a mashup of audio from the same gay porn video (lots of ass slapping) and Miku Miku ni Shiteageru, the character song for Hatsune Miku, the most well known Vocaloid. Vocaloids are essentially characters designed for the voices in Yamaha's singing synthesizer applications, and have a whole subculture around them in Japan. Dig through wikipedia if you want more.

The girl driving the steamroller is Kagamine Rin, another vocaloid. I don't know why, but Rin and her brother Len are often associated with steamrollers. I also don't know why her hair comes off.

The baby in the dude's crotch that shoots the laser and is in the sunset at the end is the Gedou baby. That link has the full story but tl;dr it's a popular japanese image macro, generally ended with "Masa ni gedou!", or roughly "What an asshole!" Fun trivia: the baby is the son of a redditor!