Background
Read 2 Chronicles 36:11-21 and Jeremiah 6:9-30 to get the context of the conditions of the time of Habakkuk and his contemporary, Jeremiah. The book was probably written around 612-606 BC shortly before the Chaldeans (Babylonians) took the first captives from Jerusalem.
If Habakkuk prophesied about 600 B.C., he lived under King Jehoiakim. The pious and well-meaning Josiah had been slain in an attempt to stop the advance of Egypt against Assyria. With his death the brief era of reform came to an end. After a reign of three months Jehoahaz was deposed by Pharaoh-necoh, who placed Jehoiakim on the throne. The latter was selfish, tyrannical and godless. In a short time the deplorable conditions of Manasseh's reign returned. (IS Bible Encylopedia)
Historical Background:
612 B.C. Nineveh falls to the Medes and Babylonians
609 B.C. Death of Josiah king of Judah
605 B.C. Babylon defeats Egypt at Carchemish - Nebuchadnezzar’s reign begins
605 B.C. Daniel and friends are among the first Judeans taken captive to Babylon
598 B.C. Second conquest of Jerusalem - Ezekiel taken captive with many others
586 B.C. Jerusalem falls to the Babylonians - Jerusalem destroyed
2 Chron 36:11-21 Zedekiah was twenty-one years old when he began to reign, and he reigned eleven years in Jerusalem. 12 He did what was evil in the sight of the LORD his God. He did not humble himself before Jeremiah the prophet, who spoke from the mouth of the LORD. 13 He also rebelled against King Nebuchadnezzar, who had made him swear by God. He stiffened his neck and hardened his heart against turning to the LORD, the God of Israel. 14 All the officers of the priests and the people likewise were exceedingly unfaithful, following all the abominations of the nations. And they polluted the house of the LORD that he had made holy in Jerusalem. 15 The LORD, the God of their fathers, sent persistently to them by his messengers, because he had compassion on his people and on his dwelling place. 16 But they kept mocking the messengers of God, despising his words and scoffing at his prophets, until the wrath of the LORD rose against his people, until there was no remedy. Jerusalem Captured and Burned 17 Therefore he brought up against them the king of the Chaldeans, who killed their young men with the sword in the house of their sanctuary and had no compassion on young man or virgin, old man or aged. He gave them all into his hand. 18 And all the vessels of the house of God, great and small, and the treasures of the house of the LORD, and the treasures of the king and of his princes, all these he brought to Babylon. 19 And they burned the house of God and broke down the wall of Jerusalem and burned all its palaces with fire and destroyed all its precious vessels. 20 He took into exile in Babylon those who had escaped from the sword, and they became servants to him and to his sons until the establishment of the kingdom of Persia, 21 to fulfill the word of the LORD by the mouth of Jeremiah, until the land had enjoyed its Sabbaths. All the days that it lay desolate it kept Sabbath, to fulfill seventy years.
Habakkuk's name menas "embrace" and he describes himself as "the prophet" but nothing else is know about where he lived or his background.
The spiritiual condition of the people at that time was that of wickedness, injustice and a disregard for God. Habakkuk questions God's integrity by asking "how long" will God allow this to continue? 1:2-4
This is a great 8 minute video modern day rendition of the book of Habakkuk
http://www.youtube.com/watch?v=f6WsxPBRRU0