According to Bobby Prince, the Arch-vile is an evil healer, who blasts his way through demons, but then reanimates all of them. The Dual Personality gave him the idea of giving it an evil laugh.

The laugh itself is of a young girl saying "why" with the pitched shifted down, and mixed with other sound. This was done as the Arch-vile doesn't understand why anyone would want to kill him as he sees himself as only doing good for his fellow demon.