What we refer to is cosmic humor. If you can't laugh at some of the stuff that comes up, you could get so depressed that you may commit suicide. So yes, you want to be able to look at some of the silliness in your mind and go, "Good grief! I ain't going to do that!" and just laugh about it. You also want to be able to enjoy the hard work without becoming too heavy.
You may have noticed in the normal 10-day retreat that my talk on the first evening has virtually no humor, other than maybe "breaking my knees and hips". The next morning there is basically no humor. The Five Hindrance talk has a tiny bit, but often people don't catch it. The next morning has no humor. The Compassion/Lovingkindness talk the next night has no humor. In day 4 morning Rosemary talks about the VRs and VVs, day 4 evening last night they were cracking up. Unpleasant Physical Sensations - "can you do that for four hours?" and that sort of stuff.
We feel that in the beginning of a retreat, humor isn't really appropriate, we want people to be here to work. We want people to be serious about it. Imagine if we started using humor, you know, "4 hours stroking your skin" on the first night, that is not what people really came for, they came to learn Dhamma and techniques to help themselves rather than be entertained. So first we have to understand, yes, it is hard work. Therefore we make sure people get the hard work first and then we teach them how to appreciate it and be able to laugh at their own conditioning. Our regular retreat is designed in that way where we bring in the humor, but a bit later, to make sure people know that the real work that has to be done is very important and being so is also hard.