Yeah, the specific reason it's funny is because it's a mistake! I for one am glad that Laura is down to earth enough to laugh and joke, rather than being so tightly strung that she has to pretend to not think about such a thing.
And by showing that both she and the president can laugh and joke like real people, at an event that is a traditional roast of the president, takes the sting out of all the jokes commonly made about GWB. The traditional appearance of the president at this events is ~supposed~ to be humanizing, and a chance for the president to say "You can make fun of me, I'm not hurt by it".