The middle is meant to be the funniest and usually involves bestiallity, necrofelia, incest, feces, urine, and other kinds of filth. I guess you could say the point of the joke is to see who can make it the most disgusting.
2) The funniest fucking joke in the entire universe.
The point of this joke is not the punchline, "The Aristocrats!", but rather the gratuitous descriptions of the sex acts and bodily fluids. These vary depending on the teller. Below is a short example of the joke.
The father proceeds to undress himself and rips the clothes off his family, have all sorts of sex with his entire family, and by the end, the room is covered in urine, semen, feces, blood, sweat, tears, vaginal juices, vomit, hair, spit, earwax, mucus, toenails, fingernails, and little bits of skin.
You can imagine the kind of things that must have gone on...
When asked what they call the act, the father responds,