I prefer Lungfishopolis, but yeah, Psychonauts is teh awesome funny.

Banjo-Kazooie
Banjo-Tooie

man those conversations LMAO

Super Paper Mario was hilarious.

MGS 3

I can't believe I forgot about Banjo-Kazooie and No More Heroes..

de Blob had some charming humor to it too.

Mario and Luigi: Superstar Sage and the Phoenix Wright games are contenders, but Fable 2's self-referential humour has given me plenty of blatant laugh-out-loud moments.

-"You know, they say the world's much bigger than it was 500 years ago!"
-A statue dedicated to the first game's Guildmaster says "Your health is low."
-"Do you ever wonder why there's only one dog in Albion?"
-An entire book written about magical Orbs (Other Reality Based Selves) that the hero may or may not be able to see, which interact with interdimensional alternate versions of Albion, where the hero may even be a woman!
-A play that some kids put on about my adventures, in which the young girl playing me "Swiped at the Balverine for eleven points of damage!"

God, I love fourth-wall breakage

Tim Schafer games ;)

Conker's Bad Fur Day is a hilarious game, and one of the first to spoof the popular movies in the day (the Saving Private Ryan scene was absolute hilarity). There's so many memorable moments in that game... and they're all amazing.

Plus, it reminds me of the humor found in the Venture Bros. series because like the show, it's a game that deals with the failures of the many different characters.

Paper Mario series.
Red Alert series.

No one else has said it so it's up to me: Giants: Citizen Kabuto was hilarious

but if you ask me now, the answer is easy. No game is as funny as Portal.