The first several pages of this is a “sideways” issue, meaning that it’s read like a calendar instead of a book. That’s been done before. It enables artists to make use of a different sized space.
Abomination has been through a lot of changes lately, as has Hulk. When he’s hiding in a trenchcoat and comes upon Hulk, Hulk thinks Abomination is his own grey self. Both of these characters have been going through identity issues, so having them fight through New York enables Peter David to write the hell out of Hulk’s mindset.
The hallucinations are due to the interference of Mercy, who has also used her abilities to make Abomination stronger–all in an effort to get Hulk to kill himself.
Of course, Hulk doesn’t succumb to dispair.
At the end of the issue, Mercy shows Hulk silhouettes of people who are coming to get him–it’s the Celestials who are about to make the heroes start returning from their reborning. This part of the tale is continued in Heroes Return.