The microverse which exists in the context of the HALO universe was a source of creative energy, which enables only one person at a time to create anything that can be imagined. The only problem is it exists in the sub-microscopic realm within the nucleus of a single atom, and requires very peculiar measures to access it. The villain known as Dr. Hood used the O-Gate to merge two universes, combining their laws and allowing him access to the microverse, creating the HALO universe in the process.
The microverse exists within the universe known as Happy Forest, which in the "real world" was a group of funny animal comic books. It is revealed to have been part of a story in a Happy Forest comic which bore a resemblance to another story which already existed, "Morton Meets a Mite." (This, in turn, is a parody of Dr. Seuss' Horton Hears a Who.) The Happy Forest story was never completed due to legal action, which seems to account for the untapped creative energy within this microverse.