Basically, Costume Quest is a RPG where your party turns into super powered versions of your costumes while in battle and when out of it walk around as normal kids completing quests and searching for stuff. The battle gameplay depends on two main factors that you must worry about and your current level, but since the amount of XP you can acquire is set just visit all the houses and battle everyone you see and you will be at the expected level. The things that you actually have a hand in is your costume and battle stamps. You get new costumes be searching the map and finding pieces of costumes and as soon as you have a new one anyone in your party can use it. They all have different stats (health and damage, important early on but less so latter), special attacks (which you can use once every three turns), and some have environmental abilities. For the most part the ones that have environmental abilities are necessary at some point to continue, but the amount varies a lot and particularly the robot costume is useful simply because it allows you to walk far faster. The battle stamps start out quite mild but by the end are where most of the customization comes in; Do you want any one character to have double the attack power, get a huge amount of health every turn, or have a powerful stun attack; you can do that, the only problem is that you are limited to one per character.
The game is simply fantastic and a must play for all lovers of Psychonauts.