I didn't catch the jokes, and Michelle Malkin is not very specific, but I'm inclined to agree with her. Laura Bush has spent a great deal of time and effort helping her husband by acting like a lady in public. Telling off-color jokes spoils the brand name, to borrow an advertisers' phrase.
What does it gain? Next time any of those reporters has a chance to stab the President or the First Lady in the back, he will certainly take it. None of them will act any better for laughing at these jokes. But they may well lose some edge with the Evangelicals and others. And for what?
I think the actual writer of the jokes is to blame a lot more than Laura Bush. I got the sense that she was just reading something someone had handed to her a couple hours before with the instructions, "Here's your speech, First Lady. Enjoy!"
It's possible she didn't even understand some of what she was reading. Or maybe she understood it but had no idea how to get herself out of the situation.
Or I suppose it's still possible she understood how raunchy some of the jokes were and didn't mind presenting herself that way. But this I find a little hard to believe.