Phrase to indicate that a person is incredibly easily amused. Often used in the presence of children, the effect being they laugh more. However has also been proved effective on adults even if they've already heard it. Originates from a strange British family whose other phrases include as dry as a nun's gusset.
Mother: (makes appropriate amusing face)
Child: (laughs uncontrollably)
Mother: You'd laugh to see a pudding run!
Child: (more raucous laughter)