When someone has a terrible sense of humor. Phrase is derived from when you tell or make up a joke, and the said person thinks that if they replace the original subject (apples) with a new subject (oranges), it becomes a new, refreshed and hilarious joke. This happens often with one liners, etc.
1. Bob: "dude, i think this gatorade is bad...*smells bottle and checks expiration date*
Tom (a normally quiet supervisor at work): IT'S PRESERVATIVES AND FUCKKKKIN' WATER!!!
*everyone looks surprised*
**everyone quotes the yelled phrase at random as an inside joke***
then two weeks later, Tim yells "IT'S H2o AND FUCKIN' SUGAR!!!" expecting the same effect. no laughter.
2. Carlos Mencia's career is also a giant collection of apples and oranges humor.