OK, I saw this one again (for the second time) and I can't tell what Rachel says during this scene (and was wondering if the script was transcribed incorrectly)- (From www.thecfsi.com):
-------- [Scene: Monica and Rachel's, Chandler comes running in. Everyone else is already there.]
Chandler: Where's Monica?! Where is she? I need to talk to her! It's urgent! Is she here?
Monica: (raising her hand) I'm Monica.
Chandler: I need to talk to you, it's urgent!
Monica: Okay.
Chandler: Okay, I've been doing a lot of thinking about us, y'know a lot of uhh, us thinking. And uh, well I guess there's only one-one way to do this. (He slowly and awkwardly gets down on one knee.)
Monica: Wait what-wh-wh-what are you doing?!
Chandler: (getting out a ring box) Monica�
Monica: No-no, don't-don't-don't do it!
Chandler: Will you marry me?
(Phoebe hides her eyes in shame. Rachel is starring at them wide-eyed and open-mouthed. Joey and Ross are stunned to temporary silence.)
Ross: Oh-no. No. No.
Joey: What a bad idea!
Rachel: Ohhhh, I cannot look at it! (She doesn't move.) -------
I thought Rachel said "I can't not look", because she has her hands holding her head fixed on C&M. The humor (IMO) comes from the fact that one might feel the urge to "not look" and turn away from something such as what is unfolding in front of the group (like Phoebe did), and Rachel acknowledges this urge, but doesn't want to miss anything because it was obviously unexpected so soon.
I understand the humor in the the script as-is, and either way it's funny. Just curious what everyone else heard. . .