I think real happiness comes from true compassion, the ability to accept what can't be changed, and the motivation to change for the better what is possible to change, where necessary. Proper altruism, helping other people and making a real difference, however small, gives us a sense of meaningful joy that possessing all the cars and holidays and yachts combined couldn't deliver. Accepting our situations and circumstance and being at peace with them drastically reduces our mental suffering, and making positive changes where possible allows us to actively engage in being at one with ourselves and those around us. All these things contribute heavily to lasting happiness.
I say "lasting" happiness, because it'd be silly to suggest that a nice holiday or having just bought an expensive car doesn't bring happiness - of course it does, but these things (material gain) have an extremely limited...happy factor
Even if we were to win millions of dollars on the lottery, of course we'd be happy for a short while, but ultimately, the happiness would lose its flavour; it's like when we chew gum: the taste is vibrant and wonderful for a little while, but it soon becomes stale, and even if you add fresh gum, though the flavour returns, it too soon becomes stale, and no matter how much you repeat the cycle, it is ultimately useless.
However, when we engage in compassion and truly understand our reality, our happiness becomes much more fulfilling and it lasts. There is such a huge satisfaction to be had in helping others, and as well as benefiting people, there is the nice paradox that, while you are altruistic, you are actually helping yourself enormously. Why? Because when you come to understand that we are all part of each other, when we can look past our various differences and focus on the larger common ground we all share, we come to realise that by helping others, we are helping ourselves too - we're all connected.
Unfortunately, a lot of people look for happiness in the wrong places. As Spirit says, "we usually settle for half baked theories on what causes happiness". This is true. Look around yourself. All the adverts, the slogans, the signs, the businesses, the companies, all telling us that if we're not happy we should buy this new car, or we should eat this brand of food, or we should sign up to this agency and find love and be happy - this is nonsense. All these things provide states similar to being drunk: sure, you get a (delusional) happiness, but at some point you're going to suffer for it
Even religion is guilty of producing "half baked theories" on how we can be happy. If we would only believe in this God or that God, or read from this book, or worship this guru over that one, we can find ultimate happiness. Not at all. Of course we must be careful not to fall into the trap of "spiritual materialism". We work to shun certain desires through our chosen religions, only to debate about who knows more, or whose God is bigger, or whose mantra is more powerful etc. When we do this, we merely swap one set of complications for another, and does it produce happiness? No. All it does is serves the ego, and ironically, we'd be just as well off chasing material wealth for all the good that does.
Joey said that happiness comes from what you think makes you happy. In part, this is true. Where it is problematic is that, if someone believes that money makes them happy, or sex, or cars, or gambling, they may of course believe this for a short time, but it will soon become apparent to such people that they're not happy at all. They will always be left searching for more, and since all desire is insatiable, it's gonna be a LONG search!
However, as Buddhism teaches, if we educate the mind to what brings real happiness, if we can unlearn all the "half baked theories" and focus on what truly wil make us happy and content, then through our education of the mind, and therefore through our thinking, our actions will lead us to doing acts that should hopefully benefit others and, in turn, deliver lasting happiness to us as well.