FRED WILLARD
Roasted By Fallon
Were You Watching 'Free Willy?'

It's a good thing Fred Willard can laugh at his XXX movie arrest ... cause last night Jimmy Fallon was crackin' a whole bunch of jokes at Fred's expense ... and it was pretty damn funny.

Among the zingers ... Fallon tried to guess the movie Willard was watching.

"Was it 'The Firm'? ... Was it 'Free Willy'? ... Was it 'Anaconda'?"

Willard replied, "Sadly, it was 'Get Shorty."

There's more ... it's hilarious.

But after the jokes ... Willard got sorta serious ... telling Fallon the entire ordeal is "painful" and "embarrassing" ... but he's trying to laugh it off.

As we previously reported, Willard was arrested for lewd conduct at the Tiki Room theater in Hollywood earlier this month. However, the actor won't be charged with a crime as long as he completes a 2-week educational program related to the offense.