"V for Victory" was a popular slogan with the Allies, with numerous plays off of it, most famous being Winston Churchill flashing the "V" with his fingers, as well as adopting the opening bars to Beethoven's 5th Symphony - dun dun dun duuuuuuuuun - as an aural representation as it imitates the dot-dot-dot-dash of a "V" in Morse Code (if you've watched "The Longest Day", they repeat it a lot).

So anyways, the joke here is that because it is associated with "Victory", Hitler gets upset by simply seeing the letter "V".