Has it really been 12 years since we experienced Happiness? How time flies when you're trying to get over the discomfort caused by an extravagantly repellent comedy. Comments on the movie's IMDb discussion board include "If you enjoyed this film, you are a sick, demented, despicable freak", "I felt ill after watching this" and "The cum shots . . . totally pointless" - the sort of criticisms, in other words, with which Driving Miss Daisy never had to contend.

The picture's potpourri-scented nastiness has since been absorbed into the mainstream, but Happiness was an original. Although Todd Solondz's film was as heightened in its extremity as a slasher movie, the characters retained an emotional plausibility. Maybe you've even found yourself wondering what the old gang has been up to.

How's Joy, the winsome songwriter whose almost-boyfriend Andy killed himself after she dumped him? What became of Allen, the neighbourhood sex pest? Not forgetting Joy's brother-in-law, Bill Maplewood, a softly spoken psychiatrist who raped young boys. His oldest son must be in college now. Don't they grow up fast?

Life During Wartime invites us, in the manner of a spam email from Friends Reunited, to catch up with people we hoped never to see again. But this has one jarring difference from most sequels: Solondz has recast every part with a flagrant disregard for continuity. Forget the regeneration in Doctor Who - wait until you see who Philip Seymour Hoffman, the original Allen from Happiness, has turned into this time. Michael Kenneth Williams, aka Omar from The Wire, that's who. Gregor Samsa himself would baulk at the metamorphosis.

Allen is now married to Joy (Shirley Henderson), and the new film opens with them celebrating their anniversary in a restaurant. An early indication that Solondz is getting too smug for his sandals comes when Joy confesses to experiencing a little déjà vu. After all, Happiness began with an identical shot, only there Joy's tearful companion was Andy, who presented her - as Allen does - with a silver ashtray on which her name is engraved. Allen found it on eBay, a reminder of how much has changed in the intervening years. Another sign of the times is the music. Life During Wartime closes, as Happiness did, with a souped-up version of one of Joy's twee ballads, but now Michael Stipe has been replaced at the mike by Devendra Banhart in a musical equivalent of those "Going up/Going down" popularity charts in the weekend supplements.

Aside from Joy's déjà vu, the film goes easy on the in-jokes. Solondz even cuts his maligned home state of New Jersey some slack. Bill's wife, Trish (Allison Janney), has moved to Florida, where the apartment blocks resemble kindergarten building bricks. Her middle child, Timmy (Dylan Riley Snyder), has learned the truth about his father from schoolmates, prompting awkward questions for his mother and a reprise of the first film's parent/child chats that stray far beyond the birds and the bees. Bill (Ciarán Hinds), just out of jail, is the dark cloud in Timmy's life, but the film presents gradations of inappropriate behaviour. Devotees of The West Wing may find it even harder than the rest of us to hear Janney, the woman formerly known as CJ, telling a 12-year-old boy that her lover makes her "wet all over".

Despite some fantastical touches, such as Joy being sexually harassed by the ghost of Andy (Paul Reubens), the first film's shock value has necessarily diminished. This allows for a more contemplative work. Not that Solondz has tired of petty point-scoring, as demonstrated by the scene in which a comforting phone message is left for a man who killed himself only moments earlier. Not enough irony? Then let's have the camera pan across from the answerphone to his irredeemable body.

Where the horrors of Happiness were laced with rancid humour, Life During Wartime has a more sober tone that springs from its awareness of regret, loss and consequence. Solondz gives a lot of time to Timmy, whose emotional panic leads him to thwart the stability he craves, and there's a captivating encounter in a hotel bar between Bill and a dead-behind-the-eyes divorcee (Charlotte Rampling, channelling Joan Crawford). On screen for just five minutes, she blithely manages to declare herself monstrous before delivering a line that could be the motto of Solondz's work to date: "The enemy's within."