Horatio asks Hamlet what is the portent of the drums and other noises he hears and Hamlet explains that it is a great party that is tradition in Denmark. Though he is "native here and to the manner born," he thinks it is really a sad tradition to uphold and that other nations look at it as good evidence that Denmark is in fact a nation of drunkards and that their poor reputation is based on fact.
Hamlet feels that this sort of partying and carrying on takes away from the great achievements and the warlike and powerful nature of Denmark, particularly as he remembers it under his father's rule.
This conversations is one of the most interesting ones in the play because Hamlet is talking specifically about personal flaws -- ie. tragic flaws and where they orginate from. It is, in a sense, Shakespeare talking about his tragic hero. Hamlet starts the speech talking about the excessive drinking in Denmark and how it affects everyone's perception of the country, but he then uses that idea to launch into an analysis of human flaws and notes that they can come from "a mole of nature" meaning something someone is born with; they can come from an "overgrowth of some complexion" meaning there is an unbalance of the humors in the body that affect the personality; or they can be "a habit overlevened" meaning something that starts as a habit and becomes an addiction. In the end, it doesn't matter where the flaw comes from, the fact is the flaw exists and it can ruin the whole of the person. He starts out saying that about Denmark, but concludes it as a truth about human nature.