The Day of the Dead has its roots in Catholicism and All Saints' Day, reinterpreted by the Hispanic community in Mexico and elsewhere. In Mexico it is celebrated on November 1st and in Costa Rica it is celebrated on November 2nd, which offers a hint of its numerous interpretations.
It is often used as a sort of memorial day, where family and friends as well as national heroes are remembered. In some places, altars are erected and the favorite foods of the deceased are served in banquet style with friends and neighbors in attendance. Photographs and remembrances are displayed on altars, following in the belief that the deceased visit on this special day. Trips to the church and to the graves of loved ones are made and there is more celebrating than grieving.
There are those who see these festivities as pagan in nature or just plain foolishness. Draped in the old Catholic traditions combined with Aztec and Mayan tradition, many see these activities as antiquated Third World posturing. Is it? To honor the dead and to believe that their spirits visit when we make them most welcome isn't all that out of touch with much that is "New Age" or the latest alternative philosophy. To celebrate the memory of those who have walked amongst us and left an indelible impression is most assuredly not madness. Life and death go hand in hand. Perhaps on the other side of the fence there are those who spend a day celebrating Dia de la Vida.
Source: Mrs Dead Guy
For those interested, Dia del Hombre Muerto is November 3rd