He said it, it's true - and out of context, it sounds pretty lame, I agree.
However, I feel that how it was interpreted is pretty ridiculous (dissected to the point where even some of their own commentators walked off set and said that it was too much) in relation to what was intended behind the words.
In context, to me it was pretty clear that his intent was to say that she's unremarkable in regards to her race, ie, not an extremist. That isn't offensive at all, to say someone is your average person.
Taken out of context, it's easy to assume what was meant. The wording there was poor; Obama is, after all, only human, and in relation to the multiple verbal blunders our current president has made, this is far more minor and insignificant, imo at least. In that regard, it does make me giggle a little bit at people who praise and rejoice at Bush's feet (the more extreme Fox News commentators), a man who has entire books citing thousands of quotes of pure idiocy, picking apart and taking something like this to such extremes.