What does "laugh at gilded butterflies" mean in King Lear?

I tend to agree with the previous post by mfrison.  The line implies that it is foolish to gild a butterfly since it is already naturally beautiful and does not need artificial enhancement.  It suggests the way that Lear has come to view life:  it is inately beautiful and does not need to be clothed in beautiful garments.  What Lear sees around him is a court that is striving to attract attention by being richly attired, but by doing so, they are hiding the real beauty of life.

It is truly glorious to be able to laugh at those who are overly ornamental. King Lear's two older daughters cover themselves with their regal adornment, but inside, they are full of poison, as just so happens to become a literal part of the play.

Imagine two birds in a cage laughing at the overly ornamental butterflies which fly around freely as if they are really special. It is what the two birds have really come to know and understand. Caged birds can sing, pray and laugh at gilded butterflies because the butterflies do not realize how fragile they are.

Sure, the butterflies are beautiful to the outward eye, but excessive show is ostentatious and quite unnecessary. Ironically, King Lear in his madness has learned much wisdom. He now knows who truly loves him and he wants to spend his days in prison with her, Cordelia, singing, praying, telling old tales and laughing at gilded butterflies. He has learned to laugh at those who are pompous in their royal positions.

It is possible to be free inside a cage. Laughing at gilded butterflies is a past time, something wonderful. Making fun of those who think they are prestigious and better than others is a truly healthy mental exercise.

Poor gilded butterflies. If only they could switch places with King Lear at this point in his life, they would perhaps have lived to a ripe old age and enjoyed every minute laughing at gilded butterflies.

The word "gilded" can mean 'deceptively pleasing' or 'covered with blood'.  When both of these definitions are applied to the two other daughters, it shows that Lear is 'laughing' at them because of their 'false fronts', but it also holds the darker meaning that Lear's and Cornelia's blood is on the heads of the other two daugthers. 

What does 'we will laugh at gilded butterflies' mean in King Lear?

Good question. It's a passage that puzzles a lot of readers. Here it is:

LEAR
We two alone will sing like birds i' the cage:
When thou dost ask me blessing, I'll kneel down,
And ask of thee forgiveness: so we'll live,
And pray, and sing, and tell old tales, and laugh
At gilded butterflies, and hear poor rogues
Talk of court news; and we'll talk with them too,
Who loses and who wins; who's in, who's out;
And take upon's the mystery of things,
As if we were God's spies...
(Act V, Scene 3)

First, some context. Cordelia's army has lost the war, and the mad old king has been reunited with his daughter. She is now being led away to prison - as is King Lear - but Lear, by this late stage in the play, has realised that his other daughters, Regan and Goneril, have deceived him and lied to him. He 'sees better' (to quote another line in the play) than he did at the start. He's realised that Cordelia is good, honest and true.

This is why this speech is so moving. Even when Lear is being taken away to prison, he says that he and Cordelia will sing like caged birds - not be like men behind bars, but happy, singing birds. He'll bless her (meaning to approve of her and wish her well) and ask her to forgive him (presumably for the mistakes he's made so far in the play!).

In this way, ('so'), Lear says, they will live - and 'tell old tales' and 'pray' and 'sing'. It's a vision of a simple, happy life reunited with his favourite daughter (and let's face it, she was always his favourite).

So now we come to the gilded butterflies. There are two possible readings. One is really simple: along with the other list of happy things the two will do together, they'll laugh at butterflies when they fly past. 'Gilded' can just mean 'golden' - a reference to the pretty colours of the butterflies' wings.

The other reading is more in line with the next bit of the speech:

...and laugh
At gilded butterflies, and hear poor rogues
Talk of court news; and we'll talk with them too,
Who loses and who wins; who's in, who's out.

This interpretation imagines that the gilded butterflies are the well-dressed, glitzy, dressed up people flitting around at the court. Lear thinks that he and Cordelia will laugh at the pretensions of people who think court life - in the royal palace - is important, and who dress to impress. They'll also listen to the poor fools (or 'rogues', to use Lear's word) talk about who has the king's favour and who doesn't.

What Lear has realised, though, is that the wealth and the finery of court dress and of 'important life' is unimportant - what really matters are the simple things. It's a sad moment of realisation which has cost Lear a lot to achieve.

What does "and we shall all laugh at the gilded butterflies" mean in King Lear?

You have hit the meaning exactly. Lear says this as he & his daughter Cordelia are being led to prison. He has since realized that Regan and Goneril have lied to him and betrayed him, while Cordelia remained loyal. She is the only one who was honest with him, although her answer greatly enraged him at first.

Yet now he is almost looking forward to a simple life with Cordelia, where they can listen to court gossip and laugh at the foolishness of it all. Essentially, he is calling the others prisoners as well, although they may be unaware of it. A gilded butterfly would have unnecessary extravagance, and would also be unable to fly. Thus he and Cordelia will laugh at their pettiness and the fact that they are just as trapped. Here is the full quote:

"We two alone will sing like birds i' the cage…

…so we'll live,

And pray, and sing, and tell old tales, and laugh

At gilded butterflies, and hear poor rogues

Talk of court news; and we'll talk with them too,

Who loses and who wins; who's in, who's out;

And take upon 's the mystery of things,

As if we were God's spies…" --King Lear, Act V, Scene 3

On a side note, I find it interesting that this quote has suddenly found popularity on the body of Megan Fox. It seems rather ironic to me, as many would consider film stars the gilded butterflies of our society. Indeed, those that seek plastic surgery or outrageously expensive clothes to enhance their already natural beauty should think upon this quote.