And he was laughing because he knew that in his reply he would be able to make Hillary seem silly, as indeed he did. He deftly made her seem petty, and even a bit silly, so the audience stated laughing. Hillary tried humor too. At the opening of the debate - alluding to the SNL skit that mocked the media's favoritism towards Obama - she said: "Maybe we need to see if he needs another pillow." That got groans from the audience.
She's tried everything in the last week, and nothing has worked. As Maureen Dowd says:
After saying she found her “voice” in New Hampshire, she has turned into Sybil. We’ve had Experienced Hillary, Soft Hillary, Hard Hillary, Misty Hillary, Sarcastic Hillary, Joined-at-the-Hip-to-Bill Hillary, Her-Own-Person-Who-Just-Happens-to-Be-Married-to-a Former-President Hillary, It’s-My-Turn Hillary, Cuddly Hillary, Let’s-Get-Down-in-the-Dirt-and Fight-Like-Dogs Hillary.
And it is all because she has no genuine voice, and the voters know it.
Here is something else worth reading. A long essay by Sean Wilentz that makes a strong case that that it hasn't been the Clintons who have been race baiting during the past few months - it has really been the Obama campaign.