Get pieces out, open the centre, eat king.
How to play vs. fast pawn advancement?

There's nothing strategic in such pawn advancements because they lead to falling behind in development and center control. Advancing flank pawns is meant to gain space or to attack, but if one can't control that space or has no active pieces to attack with it's useless. Against such play what you need to do is get center control, develop, then attack your opponent's king or pick up the advanced pawns - whatever you wish. Your opponent won't have time to defend.

^ don't underestimate crazy-looking pawn avalanches. They can become dangerous (for anybody) if your pieces are pushed around.
In fact in the most reliable openings you immeditely play to stake your claim in the centre. Both e5 and d5 are aimed at prevent or discourage further centre expansion.
Thanks guys.
I guess i am just bad at dealing with such situations. All his pawns are defended one by another, my knights are boxed out, etc. My castled king's pawns are being attacked by his pawns which makes my own king vulnerable.

I guess you have in mind this game:
What your opponent did is a bad habit called wishful thinking. He was hoping you'd play weak moves so he'd be able to avoid losing. The bad thing is you didn't exploit that idea of his. You had many opportunities to attack the center, and you didn't use them. You had better center control and piece activity, and you could have done that. You played not agressively enough and finally blundered a piece and went into a lost endgame.
Here are some possible variations. I don't claim them to be optimal, but rather illustrative about White's problems with development, king safety and center control and how you could exploit them:
So at my low level ~1200 rating, how do you deal with players who just advance their pawns in strategic manner from the beginning?
For example I sometimes get an opponent where all what he does in first ~10 moves is advance pawns and even though I have much more developed pieces, he forces me to retreat those pieces due to pawn pushes.
Also my king is castled, but his pawns are so advanced that he just busts my position.
What is best response to such play?