Just because they are of German ancestry doesn't mean they are of English ancestry as well. The Windsors still in fact find themselves descended from William I. I'd assume anyone with a grasp on English history would know the entire story, but then again who reads these days.
And the problem with that Daily Show clip is that it looked a lot more for sound-bytes than anything, mainly because that's what the DS does and does best, but still it's a shame they paint an overly negative picture of the whole affair.
Considering the fact that they really emphasized that the taxpayers were paying for the wedding, when at most, taxpayers each gave 10 cents each towards the wedding (to pay for the guards or something), which was not a state event, and most of the cost was shored up by the Middletons.