Most of us have heard of the American fashion for asking: "What would Jesus do?" You may be more surprised to learn that a book was recently published entitled What Would Bill Hicks Say?, featuring contributions from, among others, Rob Newman, AL Kennedy and Radiohead's Thom Yorke. Are we to infer that the late US stand-up, who died in 1994 aged 32, is comedy's Christ?

He has certainly risen again at this year's Edinburgh. The hit Fringe show Bill Hicks: Slight Return, in which Hicks is brought back to life in 2006 by writer and actor Chas Early, is back at the Pleasance. At the Dome, Hicks's childhood friend and one-time comedy partner Dwight Slade is staging three seminars, entitled Bill & Dwight, in which he reminisces about their relationship. And the runaway favourite for this year's if.comeddies award, the brilliant American stand-up Doug Stanhope, is forever being compared to Hicks. Which tees him off, for several reasons. "That guy would be so against us idolising him," he says. "Stop turning him into a cult, man. He was a good comic, that's all." This posthumous popularity would amuse Hicks, who struggled for years.

Before his death, his stock was fast rising in the UK, where his gigs at the 2,000-seat Dominion Theatre were broadcast by Channel 4. His US reputation lagged far behind, but a breakthrough was within his grasp: the critic John Lahr had penned a rhapsodic profile for the New Yorker after Hicks became the first act to be censored on the David Letterman show. (The offending jokes attacked the anti-abortion lobby. "Pro-life!" Hicks sneered. "Boy, they look it, don't they? They just exude joie de vivre ...")

There was no time left for Hicks to salvage his TV career - six months later he died of pancreatic cancer. But in the years since, he has become more popular than ever. It helps that the subjects of his most excoriating comedy - a Bush in the White House, a war in Iraq - remain bizarrely apposite. Books, DVDs and CDs of his work are released on a regular basis; the latest, Sane Man ("the first full-length Bill Hicks performance ever filmed!"), hit stores last year. His name has become a byword for free-thinking, outspoken, savagely funny and socially conscious comedy, and his legacy casts a long shadow.

For personal reasons alone, Slade finds the phenomenon strange. "I don't listen to his CDs. I didn't read the books. Because I don't want to relate to Bill as the icon and forget what he was as my friend." But he understands the blossoming reputation. "What happens when you die young," says Slade, "is that you freeze-frame this really energetic, wonderful life - this idealistic, uncompromising voice." Hicks has become an icon, says Slade, "for a generation that doesn't really have anybody. The 1960s and 1970s had the Beatles and Joplin, Hendrix and Andy Kaufman. But the 1980s and 90s were these empty areas of American idealism, until Bill took that role."

"It's become easy to turn him into a saint," says Early, despite there being "elements of his comedy that were difficult and in many cases unappealing". Some audiences inevitably felt hectored by Hicks's vehemence, and the fainthearted struggled with the more lurid sexual content. But his merits outshone his flaws. Above all, he was technically supremely gifted. The energy was unflagging, the jokes brilliantly honed and the stage presence mesmerising. He was also a brilliant physical comedian. Slade's Bill & Dwight show features grainy home videos of the two adolescents rehearsing slapstick routines in a California baseball park, proving that Hicks knew Chaplin's oeuvre inside out.

But the key to Hicks's longevity is his idealism; the fact that his comedy was underpinned by a passion for saving the world. Loud-mouthed controversialists are 10-a-penny in stand-up, but with Hicks, the drugs and porn shtick formed part of a libertarian, humanist, spiritual (although not religious) worldview. The tension in his work, says Slade, was that "he had a great love of people, and a great disdain for people". But he was journeying ever closer towards the former. His final testament, quoted in the 2004 collection, Love All the People, reads: "I left in love, in laughter and in truth, and wherever truth, love and laughter reside, I am there in spirit."

Hicks detested hypocrisy and intellectual laziness, and believed they could be conquered through comedy. "There is a real underlying wish in his work," says Early, "for humanity to improve and see its flaws. There is a witch-doctor element: 'Come on, people, together we can change the world.'" In this, there are echoes of Hicks's southern Baptist upbringing in Texas. "His mum once said to him, 'You're just two steps away from being a preacher,'" says Early. "And he said, 'That's exactly what I'm doing. I'm trying to get people to believe.'"

Of course, it's easy to be principled when you die young. "I've compromised myself to fucking oblivion," says Slade, now aged 45. Maybe Hicks, too, would have lowered his standards. (In a set brimming with filth and horror, Stanhope's most shocking joke imagines Bill surviving to star in a hit TV show called Everyone Loves Hicks.) But Hicks's routines on the subject remain perhaps the most satisfying expression ever of the wound inflicted on society when good people (Jay Leno, in Hicks's example) sell out. "Here's the deal, folks," he ranted. "You do a commercial, you're off the artistic roll-call forever. End of story. You're another corporate shill, you're another whore at the capitalist gang-bang. And if you do a commercial, there's a price on your head, everything you say is suspect and every word that comes out of your mouth is like a turd falling into my drink."

Given this provocateur persona, wouldn't Hicks have been dismayed by the cult that now surrounds him? Early's play asks that very question. "And I think he'd say, 'What is it with dead comedians? Haven't you got enough live ones to go around? Why isn't anyone moving the story on?' I think he would be annoyed."

Slade disagrees. "Bill was a guy who was in tune with his own voice, and who was able to amplify it into something very funny and inspirational and meaty. But there are comics all over the place who do that now. Bill raised the bar and comedy has followed. And I think Bill would be thrilled that comics are really digging deep and coming up with very interesting stuff." To honour Hicks's legacy, says Slade, isn't to get onstage in black leather, angry and wreathed in smoke. It's to tell one's own truth, as honestly and fearlessly as possible. "Give me something that is different and unique and yourself. There's nothing more refreshing than that."

For any Hicks fan, Slade's intimate photographs and films of the young Bill - goofing around in their apartment, hijacking Dwight's wedding dressed as a mafia enforcer - will be as poignant as they are fascinating. But we mustn't be too sad, says Slade. "When we were kids, Bill and I would spend every weekend putting on Aerosmith and Kiss and pretending we were rock stars. Bill loved that, because he wanted to be a rock star. And he would be thrilled by the fact that he has become one."