Gift Shop is a film-within-a-film-within-a-film that begins as a chronicle of the phenomenal rise of Street Art, then gently mutates into a satire of the art world, of celebrity, of the collectors who’ll buy anything to feel that they’re getting a slice of the zeitgeist, and of Banksy himself.

The "Lambeth Palace," as the Bristolian wall-botherer named his pop-up cinema in the dungeon-esque railway arches of Leake Street (an official, licensed graffiti zone behind Waterloo Station), hosted special previews twice a day for nine days last week in advance of the film's nationwide release on Mar. 5, 2010. The film actually got its world premiere at the Sundance Film Festival last year and its European premiere at last month’s Berlin Film Festival, but this was its first showing in the UK.

Banksy’s website, where tickets to the previews sold out in one minute flat, described the temporary auditorium as the city's "darkest and dirtiest cinema." He’d organized the screenings in Lambeth, he said, so that "normal people" could see the film "before the celebrities get stains all over the furniture." Actual normal people were in short supply, according to one furious graffiti-artist blogger, who noted, "IT girls, wannabe models and faces on the coke scene. . . . Well done Banksy," he continued, "you’ve not only made graffiti publicly acceptable, you’ve made it look so cringeworthingly gimmicky that I’m not sure I’ll ever be able to love it in the same way again. Bravo!" Other commentators in the blogosphere were not so harsh.

This person -- your normal-person author -- finally managed to get a seat on the front-row sofas on student day, when the theater wasn’t serving alcohol as its staff couldn’t bother with carding everyone. So we made do with cans of Dandelion & Burdock (a historic UK soda) and buckets of popcorn, all served by a hunched-up man inside a Banksy-designed ice-cream van.

Old and new Banksy pieces littered the dank, dim foyer: glass vitrines displaying jiving, nodding animatronic sausages; a life-sized cardboard cut-out of HRH the Queen and Prince Philip posed by a ceremonial curtain framing the "A" sign for Anarchy (which earlier in the week had been daubed over by a visitor with the words "Die Nazi Scum"); an artificial "bonfire" of Old Master paintings; a stone lion carrying a boom microphone. Reggae music was playing from tinny speakers and a raft of large bouncers weaved in and out of the crowd.

Although Banksy’s talking-head commentary is the scaffolding of the film -- still intent on disguising his identity, he’s camouflaged by a hood, low-lighting and a digital voice-distorter -- Exit through the Gift Shop is essentially about vintage-clothes store-owner Thierry "Terry" Guetta, a Frenchman living in Los Angeles who becomes obsessed with videotaping absolutely everything after his mum dies suddenly when he is only 11. Later in life, he happens upon his cousin, the street artist Space Invader, and starts filming him, too.

From there Guetta develops his obsession with documenting every major graffiti practitioner whose life he can inveigle his way into. As epic West Coast rock motors the film along, we have Guetta stumbling across the legendary Shepard Fairey in the rather pedestrian sounding Kinko’s on Vine copy shop. Amazingly, Fairey, Invader, Ron English, Borf and many others agree to let him follow them around.

The results are revealing, authentic as far as I can tell, and hilarious. The accident-prone Guetta, later to become the Street Artist Mr Brainwash, throws himself into the dangerous, vertiginous pastime, often going higher than they onto hazardous rooftops in order to film the covert operations from above. Everyone presumes the pushy but harmless Guetta is seriously working to make the seminal film about Street Art.

As it happens, in fact, Guetta is happy just filming anything and everything, and the thousands of videotapes end up stacked in boxes in the back room of his house for years to come.

Guetta develops an overarching obsession to find and film the elusive Brit, Banksy. As the film unfolds, Banksy gradually moves from the periphery of things to the center, where he becomes the big catch, the White Whale, the one that everyone’s looking for. And though Guetta only ever films Banksy from behind or in deep shadow, it becomes increasingly clear that Banksy is a master puppeteer, the one who’s pulling all the strings.

The film gets to its climax in 2006, when Banksy visits Los Angeles for his triumphant Brangelina-attended exhibition, which includes a painted elephant. Guetta does in fact attach himself to Banksy like a bivalve with a camera, winning him over, becoming a sort of assistant, and even following him to Disneyland, where Banksy hangs his signature Guantanamo Bay effigy -- a mouse in a prison suit -- over the railings of the Big Thunder Mountain Railroad ride.

As Disneyland security descends upon the art intervention -- the family-packed train carriages of the rollercoaster ride stop dead, right in front of the sinister stuffed human-sized rodent -- Banksy exits the scene sharpish, and Guetta gets hauled in for four hours of tense questioning by assorted Disney heavies. In the best film noir style, the Frenchman doesn’t squeal (and the beefcakes -– intriguingly in this post-9/11 era -- don’t confiscate this foreigner’s camera), so Banksy comes to trust Guetta even more than before. Later, Banksy shows his comrade a studio loft packed full with 100,000 forged tenners, on which the head of the Queen is replaced with a portrait of Princess Di, a prank, Banksy says, that could land him a ten-year jail term.

By now, Banksy has begun to believe that the mooted documentary might one day come to fruition, and he encourages Guetta to piece the darned film together at last from his gazillion hours of footage. Banksy was expecting a masterpiece; what he receives through the post is a curious film called Life Remote Control, a horrible, shrieking 90-minute-long mash-up of mess and noise.

Not quite the Street Art documentary that the world had been waiting for. As Banksy admits, it just hadn’t occurred to him that Guetta might not be a born filmmaker, but only a loveable loon with a manic glint in his eye and profoundly bushy whiskers on the side of his head.

Meanwhile, our Terry, back in Los Angeles, has begun crafting both his own Fairey-esque stenciled giant stickers, featuring his own face and a video camera, and his own mythical status as the street-art legend Mr Brainwash (or MBW). In London, Banksy asks for all of the original video footage to be sent to him in order to re-edit it himself, to make the film now under review, Exit through the Gift Shop.

Meanwhile, Banksy also urges Guetta to throw himself into the L.A. art scene, and put on an art show of his own. So Terry goes ahead and mortgages his house and business, introduces his wife and children to the likelihood of imminent poverty, breaks his leg, transports himself on a scooter around the hired temporary gallery of CBS TV’s derelict former headquarters, and makes hundreds of horrible derivative Pop artworks that shamelessly mimic Warhol, Banksy and Fairey. He even dashes off a few Pollock-ish paint splash pieces to be sure of total conceptual unoriginality.

The folks from LA Weekly visit the massive site and lap it all up, eventually putting MBW on their front page in 2008 as the world’s next big art star. And so he has become, up to a point, anyway: Madonna commissioned Mr Brainwash to do the cover of her Celebration CD.

Gift Shop mocks the art world, of course, for paying real money for an art form that is already everywhere free and available to all. Banksy, as Frankenstein, having created his Monster, spends the last part of the film alternately proud and embarrassed that he’s made such a mistake. "Banksy will never again help anyone to make a documentary about Street Art," flash the footnotes at the end of the film.

Banksy’s joke may be on us, but that’s the beauty and wit of the Banksy persona. Even if Thierry Guetta’s long video obsession is something of a tall tale -- and footage that is supposed to be ten years old looks suspiciously contemporary -- Exit through the Gift Shop is a wonderfully entertaining, charming and daft story of an accidental artist who becomes a millionaire overnight, while our still-mysterious Banksy, like a God in his Heaven (albeit one surrounded by a cabal of publicists), can only look on in horror at what he has wrought.

LAURA K. JONES is a journalist based in London. She has written for the Guardian, the Observer, the Times, the Saatchi Magazine and artforum.com.