The two German officers from the Adolf Hitler Division pushing the "Beautify Berchtesgaden" fundraising are referring to Hitler's resort near Berchtesgaden, a German town in the Bavarian Alps on the Austrian border. South of town, Hitler's Eagle's Nest retreat, the Kehlsteinhaus was established.
After Hitler bought a summer home near Berchtesgaden many other high ranking Nazis bought or commandeered land nearby. Then high level offices for the party were built, then hotels and restaurants. Berchtesgaden became a sort of decadent playground for the highest echelons of the Nazi Party. The humor here is in the greed of the wealthy elite coercing the underpaid lower officers to pay for luxuries for those elite officers.
After trying (and failing) to coerce Klink to give money to the "Beautify Berchtesgaden" fund, as Millheiser goes to write Klink's name on the black list, Lieutenant Schmidt intones: "Lo and behold, Col. Klink's name led all the rest." This is a paraphrased quote of the last line from "Abu Ben Adhem", written by James Henry Leigh Hunt.
This is the first guest appearance of Frank Marth in the series.
This was the only guest appearance of Roger Heldfond in the series. He played a German soldier sitting with his girlfriend, who Newkirk interrupted when Schultz came into the Hoffbrau.