The Order of the Stick meta-lampshades Lampshade Hanging.
"If, reader, you are slow now to believe what I shall tell, that is no cause for wonder, for I who saw it hardly can accept it."
Lampshade Hanging (or, more informally, "Lampshading") is the writers' trick of dealing with any element of the story that threatens the audience's Willing Suspension of Disbelief, whether a very implausible plot development, or a particularly blatant use of a trope, by calling attention to it and simply moving on.
The reason for this counter-intuitive strategy is two-fold. First, it assures the audience that the author is aware of the implausible plot development that just happened, and that they aren't trying to slip something past the audience. Second, it assures the audience that the world of the story is like Real Life: what's implausible for you or me is just as implausible for these characters, and just as likely to provoke an incredulous response.
The creators are using the tactic of self-deprecatingly pointing out their own flaws themselves, thus depriving critics and opponents of their ammunition. The Turkey City Lexicon refers to this flavor of Lampshade Hanging as a "Signal from Freud", and reminds the author that if your characters are complaining about how stupid the latest plot development is, maybe your subconscious is trying to tell you something.
On the other hand, Lampshade Hanging done well can make for an entertaining piece of Medium Awareness or momentary lack of Genre Blindness. It can also be used to take care of Fridge Logic, without having to actually do anything.
This practice is also known as "hanging a clock on it", "hanging a lantern on it", or "spotlighting it". In the film industry it's sometimes called "hanging a red flag" on something, after the screenwriting adage, "To hang a red flag on something takes the curse off of it," meaning that to lampshade something decreases the negative effects it might otherwise have. Teodolinda Barolini— Dante, The Divine Comedy

Examples
- Animated Films
- Anime and Manga
- Comic Books
- Fan Works
- Film (Live-action)
- Literature
- Live-Action TV
- Music
- Professional Wrestling
- Puppet Shows
- Radio
- Roleplay
- Tabletop Games
- Theater
- Video Games
- Visual Novel
- Web Animation
- Web Comics
- Web Original
- Web Video
- Western Animation
- Real Life
Card Games
- Shows up fairly often in the joke "Unglued" and "Unhinged" sets from Magic: The Gathering. For example, Ow's flavor text is "Have you ever noticed how some flavor text has no relevance whatsoever to the card it's on?"
- Also shows up occasionally in the regular game. Lightning bolt was a card introduced in the early generations, and is widely regarded as being overpowered. It was never reprinted after the 4th edition... until the 11th edition, with the flavor text, "The sparkmage shrieked, calling on the rage of the storms of his youth. To his surprise, the sky responded with a fierce energy he'd never thought to see again."
- Munchkin basically exists to hang lampshades, not only on the tropes of the genres each version is parodying, but eventually on itself. The "You start the game as a Level 1 human with no class" joke eventually morphed into "You start the game as Level 1 with no class and no style" and "You start the game as a Level 1 zombie with no Mojo (as this is a zombie movie, nobody has any class.)"