NOTE: This spoiler was sent in by Brentage5000, who says... "Hilarious movie, my friends. Two words--puppet sex."
The movie starts in France with a bunch of French people going about their day. A little boy gets loose from his mother and wanders around a fountain when he bumps into...Osama Bin Laden!! Osama heads for some friends while the boy's mother comes up and spies the terrorists and their suitcase bombs. Just before they can trigger them, Team America -- consisting of Nebraskan All-Star quarterback Joe, Detroit born martial artist Chris (who always wears yellow ski-glasses for some reason), psychologist Lisa, weapons expert Carson, and empath Sarah -- comes blasting into the scene...and blasting apart a few (hundred) buildings doing it. They take care of the terrorists (and the Eiffel Tower, and the Lourve) and in the aftermath Carson heads over to Lisa. He asks her to marry him...and immediately gets shot from behind by a terrorist that wasn't quite dead yet.
Some days later, we are in New York at a performance of a show called "Lease" (a jibe at "Rent," I'm sure) starring Gary Johnston. During Gary's performance, we see a cigarette-smoking man examining a file on Gary. Later, after the show, Gary is in his dressing room looking at an old picture of him and his family when the man -- whose name is Spotswood -- comes up to him. He tells Gary that he has a job offer for him and Gary -- thinking he's from Hollywood -- follows. Once they're both finally in the limo (Gary thought Spotswood wanted gary to suck his c***: important), Spotswood reveals that he is the head of Team America and he wants to recruit Gary for a mission. They head for the base -- hidden inside Mount Rushmore -- and there Gary meets the team, gets insulted by Chris (he doesn't like actors), and is told that his acting skills are needed to slip him into a terrorist network and find out where some WMDs are. If they don't find the weapons, it will be 9-11 times 100. "That's..." says Gary. "Yes," replies Spotswood. "91,100." Spotswood says that if he doesn't like the situation, "..there's the door." Gary looks and says, "Okay," and walks out. Downstairs, Lisa -- still mourning Carson -- tries to talk Gary into staying, but doesn't have much luck. She gives him her card if he changes his mind, which, after a short trip to DC (made from pretty poor home video shoots with a puppet overlaid onto them), he does.
Meanwhile, in North Korea, a terrorist is communicating through translator to one Kim Jong Il, a massive weapons dealer/terrorist/whatever. The terrorist tries to get more money, and when the translator says this, he translates Kim Jong's response as, "You must not have understood me correctly. Perhaps I should...fire my translator?" The translator looks at him just in time to get his head blown off. Kim Jong gets up and starts raving about how he will take down all of democracy and the world and yada-yad-yada, the usual stuff.
Back at Rushmore base, Gary has just come out of "surgery" (really a bad make-up job) designed to make him look like a middle-eastern terrorist named Hakmed. Him and the rest of the team head over to Cairo where there's a tavern that most of the terrorists regularly visit and talk in...a tavern that Gary has to infiltrate. They get over there, crush some buildings, and than while Gary goes in, we see Joe ask Chris why he doesn't like actors (still no answer) and Sarah saying that she feels Gary has feelings for her. In the bar, Gary screws up and ends up being questioned by the boss (of the bar). He quick thinks of what happened to his family and makes up some line about how they were working in the oil fields with his goats when suddenly the "Infidels" came and attacked, making it rain burning oil and killing all his family and goats. The guards cry and the boss approves of him just as one of the guards spots the Team standing outside. The terrorists breakout -- taking Gary with them -- and the team (except for Sarah, who said that she could feel Gary still inside the bar) heads off to rescue Gary, which they only manage to do after having blown up the Sphinx, some pyramids, and a couple of other national treasures. While they party back at base in celebration of what they think is a job well done, tons of actors from the Film Actors Guild (F.A.G.) are accusing them of mishandling the situation, iincluding Alec Baldwin, Helen Hunt, Matt Damon (whose only words in the whole movie are repeated offerings of, "Matt Damon!"), Tim Robbins, Sean Penn, Martin Sheen, Janeane Garofolo, Ethan Hawke, Susan Sarandon, and Samuel L. Jackson.
At the party, Joe is trying to get up the nerve to ask Sarah to dance with him (he's crushing), Chris is still giving Gary a hard time, and Gary decides to step out for some fresh air. Lisa--who saved him back in Egypt by pulling him from the bad guy's jeep while she was driving a motorcycle--comes out after him, and they talk. Gary says he's falling in love with her, but Lisa says that she can't do it after Carson. Then she says, "If only you would promise not to die, I would sleep with you right now!"
Five minutes later...PUPPET SEX!!! (sorry, it was just a real funny scene)
The next morning, people who live along the Panama Canal are going about their business when a big barge starts going through. It suddenly blows up, completely destroying everything around it. This causes even more outrage from the FAGs, who have now started picketing outside Rushmore base. This makes Gary start blaming himself and he quits, inadvertantly letting it slip that he and Lisa spent the night together, which makes Sarah reveal her feelings for Gary, which really crushes Joe's spirits. At the end of it, Gary has quit (headed for a bar where he gets drunk, is told that the world is divided into pussies, dicks, and assholes (more later) and then proceeds to vomit for five minutes), the team is heading for "Dirkadirkastan" (Kim Jong's country) to stop something that would be 9-11 times 1,000 ("Why that's...911,000." someone says), and Kim Jong is yelling at his terrorists to not blow up anything else until he gives the signal.
Later, the Team is headed for North Korea when they are attacked by some of Kim Jong's forces. They take most of them out while arguing, and Sarah figures out how Joe feels about twenty seconds before their all captured. At the same time, Spotswood is watching this go down when Rushmore base is suddenly blown up by suicide-bomber Michael Moore. As news of these events reach him, Kim Jong gets a little down and starts to sing about how lonely he really is. A couple of days later, at a FAG meeting, we see Alec Baldwin telling all the other FAGs that they've been invited to speak at a peace conference in Dirkadirkastan, which they all cheer at. Meanwhile, the Team is stuck in Kim Jong's prison. He comes in to mock them and tell them that his plan will be equal to 9-11 times 2,356. Joe gasps and says, "But that's...that...no one knows what that is!" (note: it's 2,146,316). Kim Jong cakles at this and turns to leave. Lisa tries to get him to release them by commenting on how lonely he must be, but all that does is guarantee her a front-row seat to the show tomorrow night.
Back in America, Gary has found his way to Rushmore base, which is totally wrecked. He finds a still-alive Spotswood threatening to kill him, but Gary says he's changed and will do anything to get back on the team. Spotswood starts talking about trust and the first night they met and what Gary though he wanted. Gary says he remembers, and...well, you can figure out where it goes from there. Regardless, Gary gets back "in," and after a montage of him getting buffed up and trained, we find ourselves at Kim Jong's palace on the night of the party. While the show is getting started and Martin Sheen and Tim Robbins guard the Team, Gary breaks into the palace with a Jedi-like mind trick and some fancy shooting. He tricks Robbins and Sheen into heading for the foyer with a bad guy mask and breaks the team out, letting them know that Spotswood is alive. They head for Kim Jong's balcony seat, but are interrupted by Damon, Garofolo, Hunt, Jackson, Penn, and Hawke. The team splits up into pairs: Sarah and Joe to take care of the actors, and Chris and Gary to find Lisa and Kim Jong. While Chris and gary are looking they find Susan Sarandon tied up. She begs to be released but Gary realizes she's acting and says, "Your powers have been weakened by time, Miss Sarandon." Susan gets up and starts attacking them but gets blown off the balcony by Gary while Chris watches stunned. He confesses that the reason he hates actors is that when he was nine, he went backstage at a production of "Cats" and they were all drunk and high and acting wild. It ends with him saying, "I was raped by Mr. Mestopholes." Gary puts a hand on his shoulder and they head back inside.
Meanwhile, Joe and Sarah have taken out most of those actors, but now they find two more...Danny Glover and George Clooney. They chase them into a hall but are trapped. They are forced to fight two of Kim Jong's panthers (played by black cats) but Sarah manages to make them attack Glover and Clooney instead. They hook up with the others and get on stage just as Baldwin is finishing up talking about the FAG way (peace, love, patience, talking, and understanding) and Kim Jong is launching his weapons...sequence countdown, which ends in five minutes. Joe says that Gary has to out-act Alec Baldwin and convince the people to reject Kin Jo.
At first Gary is intimidated by having to out-act his hero, but eventually he does, talking about how there are pussies (people like Baldwin who just take what they get), dicks (people who take command), and assholes (people who make it harder for everybody, like Kim Jong). This works, Baldwin gets shot by an angry Kim Jong, who then gets pushed off the balcony by Lisa and onto some guys spear-on-a-hat. Gary rushes up to Lisa ans asks if she's alright, but she tells him to turn the bomb off. He asks how, and she says, "The big cancel button," which he hits with a second to spare. Just as he does, we see a cockroach--the real Kim Jong Il--crawl out of his old body and into a mini-rocketship, ranting about how he will get his revenge, they will meet again, and all that junk. Gary just says that they'll be waiting and heads back out with the rest of the team, ready and waiting for his next mission with...TEAM AMERICA: WORLD POLICE.