The Gemara (Megillah 7b) states that according to Rava, we have an obligation to cheer ourselves up with wine and to drink "until we don't know the difference between cursing Haman and blessing Mordechai." The Gernara then tells us a story about Rabba and Rabbi Zeyra who were involved in a Seudah on Purim together. They both got very drunk and Rabba actually killed Rabbi Zeyra. The next day Rabba realized what he had done and prayed to Hashem for pity. Hashem performed a miracle and revived Rabbi Zeyra. The next year on Purim, Rabba asked Rabbi Zeyra if he would join him for the Seudah once again. Rabbi Zeyra answered that a miracle would not necessarily happen every time, and this time Hashem might not revive him. This story seems to indicate that we should be careful and not get too drunk.
Is it really the Halacha that a person has to get drunk on Purim?
The Rif, the Tur, and the Shulchan Oruch all codify the Halacha from the Gemara that a person is obligated, to drink until he doesn't know the difference between cursing Haman and blessing Mordechai.
The Rambam (Hilchos Megillah 2:15) and the Rama (Siman 695) both say that you should drink wine until you get drunk and then fall asleep. As the Rama, quoting the Maharil, says, when you are asleep, you don't know the difference between cursing Haman and blessing Mordechai. You should drink some wine (more than normal) and fall asleep, that your action of falling asleep will help you fulfill obligation of "Od D'lo Yadah."
Rashi on the Gemara Megillah interprets 'l'besumai' (from the Gemara written above) as "to be drunk with wine." However, the Kolbo says that "chayav l'besumai" does not mean that you should get drunk, because getting drunk is completely forbidden. Rather it means that you should drink a little bit more then usual in order that you should be sameach, happy.
The Ran and the Baal HaMaor, all quote Rabbeinu Ephraim who writes that from the action that follows Rava's statement in the Gemara, we learn that this is not the Halacha and we do not have an obligation to drink at all on Purim, because we see that drinking wine can lead to terrible deeds.
The Meiri follows the opinion of Rabbeinu Ephraim and interprets the Gemara to mean that we are not obligated to get drunk and thereby "lessen ourselves," but rather drink in order to bring us to a state of Simcha. The Simcha should not be that of "frivolity" or "foolishness" but rather be a Simcha that leads to the love of Hashem, so that we will recognize the miracles that Hashem did for us.
The Pri Chadash, however, rejects Rabbeinu Ephraim. He says that Rava's statement is Halacha because of the fact that Rabbi Zeyra said that be did not want to join Rabba the following year. This indicates that it is the Halacha to get drunk because otherwise Rabbi Zeyra would not have been afraid to come and join Rabba. He knew Rabba would get drunk again. However, says the Pri Chadash, because people today are not on such a high level, we should follow the Rabbeinu Ephraim and only drink a little more than usual so that we should not come to do anything inappropriate while drunk.
The Yad Ephraim says that the story in the Gemara is brought to teach us that one should get drunk up until, but not including, not knowing the difference between cursing Haman and blessing Mordechai (Od v'od b'chlal). The essence of the obligation of Simcha is that one should come to thank Hashem for the miracles, so if one drinks too much and goes beyond the point of "knowing," one will not be able to recognize the power of miracles that Hashem did for us and thank Him for them.
The Chayei Adam says that one is obligated to get drunk because the miracle happened through wine. We drink more than usual to remember the miracle. But, if by getting drunk one will not daven Mincha or Maariv or not be able to do any Mitzvos which one is obligated to do, then it is better that one should only drink a little more than usual or not get drunk at all.
Above all, everyone agrees, as the Chayei Adam says, that whether one drinks a lot or a little, it should be for the sake of heaven.