This is yet another book from a web site I've never heard of, TWSSstories.com. I bought it late during the Borders bankruptcy sale when the humor category was discounted 80 or 90%.
Like many humor books, That's What She Said seemed funnier in the store than it did at home. Part of it is redundancy -- when you're skipping around while browsing at the store, you don't recognize how similar many of the entries are. But the fatal flaw in this book is predictability. One of the main reasons "that's what she said" is a line that makes people laugh is that it is not expected. Somebody innocently says something that could be interpreted sexually, and someone else blurts out, "Yeah, that's what she said!" But when you collect hundreds of these situations together in one book, you eliminate that element of surprise. I used to have friends who overused "that's what she said" to the point of obnoxiousness (not hard to do), and this book reminded me of them.
The most incredible thing, however, about That's What She Said is that my wife let me read the first 100 pages -- more than half of the book -- aloud to her. She even laughed a few times.