Joey's men's lipstick commercial is an inside joke about how some famous actors made some embarrassingly funny commercials in Japan back in the 1980's and 90's. Several big name actors (like Tom Cruise) made similar Japanese commercials (for very large sums of money) on the assumption that since they would only be seen in Japan, no one in the West would ever see them. This was before the creation of YouTube, and some of these commercials have since been resurrected.
The outfits that the girls are wearing in Joey's commercial is the same as Rachel is wearing while watching it
Rachel's description of Gladys to Joey closely resembles the Japanese legend of "Teke Teke", the vengeful spirit of a woman who was cut in half and drags her torso while searching for victims making a "teke teke" sound. Some versions describe her stealing the legs of her victim.
In this episode, Monica initially doesn't know what "Gladys" is and is horrified at the idea of the artwork being in her apartment. However, in previous episodes featuring flashbacks to when Phoebe lived with Monica, "Gladys" was prominently displayed by Monica's front door.
Phoebe's sculptural painting, Gladys, also appears in the movie Warlock (Julian Sands). About 22 1/2 minutes in, you'll see it hanging on Kassandra's (Lori Singer) bedroom wall. The only difference is Gladys wears blue & Kassandra's is wearing pink.