A character account is an account created specifically to post (usually as jokes) in a certain style or context, usually when the account owner also owns an actual, factual Shacknews account. For example, if a Shacker registers an account named "Homer Simpson" specifically to post "D'oh!" every time something unfortunate happens, the "Homer Simpson" account is a character account. Doing this will usually get both accounts banned.
It should be noted that using one's regular account to make a contextual or stylistic joke when the opportunity arises is NOT bannable and frequently results in hilarity. For example, if "Homer Simpson" were the actual, main Shacker account, and another Shacker posted about bad news, and "Homer Simpson" replied with "D'oh", there would probably be many lols and everyone would go along with their lives without a ban in sight. The key here is that "Homer Simpson" contributes productively to the community and does not only make joke, contextual posts.
Historically, character accounts were not always bannable and have been responsible for infamous posts in the past, however character accounts are currently a bannable offense. The line can be thin and is up to interpretation by the mods. D'oh!