Still dont understand... can some1 explain it better?

It is referring to an episode of a TV show called the office. It's not funny anymore. Do not laugh when someone says that.

ok Kagome fell right into a nicely in her mom's back backyard at some point and went back to feudal Japan and found out she became into the reincarnation of a capacity priestess Kekiyo.Kekiyo and Inuyasha fell in love alongside time in the past and Naraku replaced into Inuyasha at some point to kill Kekiyo and she or he then sealed Inuyasha to a tree thinkin Inuyasha became into the only that tried to kill her.Kagome whilst she fell in the process the nicely enable Inuyasha unfastened and ever in view that then they are going after Naraku

It's like the new cliche word of the year.

Whenever someone says something that can be taken the wrong/perverted way, you would say "That's What she Said!"

I don't get who the hell made this up and what a girl has to do about it though. :P

ok Kagome fell right into a nicely in her mom's returned backyard sometime and went returned to feudal Japan and found out she became the reincarnation of a potential priestess Kekiyo.Kekiyo and Inuyasha fell in love alongside time in the past and Naraku replaced into Inuyasha sometime to kill Kekiyo and he or she then sealed Inuyasha to a tree thinkin Inuyasha became the only that attempted to kill her.Kagome whilst she fell in the path of the nicely permit Inuyasha loose and ever on condition that then they are going after Naraku

Hmm neither do i...its just a fun catch phrase to say i guess

they are referring to a dirty joke. for example, if one was talking about a test and said outloud "omg it was so hard", and someone says "thats what she said" it means that when a man and woman were getting intimate, saying thats what she said refers to his hard dick.

that is what she said.

bascially what some other female had said to somebody

it means, she said that