He loses his cool and becomes a blithering, spitting idiot in 2 seconds flat at the mere mention of RACHEL.
I never understood why Batman would want all the lights on in the interrogation room, exposing himself to not just the Joker, but to all the GCPD as well. Kinda goes against intimidation tactics and what Batman's MO is all about. Joker actually looks kind of scared and uneasy when Gordon abruptly leaves and closes/locks the door. He definitely doesn't know what to expect. Then, on come the lights and oh, it's just Batman in one of his silliest suits to date. Kind of hard to fear Batman when he's gracing your presence in all of his glory right there in front of you in full lighting. Doesn't leave much to the imagination and doesn't paint Batman in a very competent light.
Now I don't think Batman should always come out on top as an unstoppable bad ass, but he looks really pathetic and goofy in most of the two Dark Knight movies. Even when he finally stops the and outwits the Joker he's huffing and puffing, crouching and sounding like Daffy Duck, talking with his tongue.
Still, I love that scene. It's definitely Ledger's best. I was grinning from ear to ear when he starts howling with laughter as Batman punches him in the face, mouth agape in confusion when I first saw it in theaters.