One thing I learned watching the 40th anniversary of Sesame Street DVD: Oscar the Grouch was originally orange. Jim Henson decided to make him green before the second season of Sesame Street. How did Oscar explain the color change? He said he went on vacation to the very damp Swamp Mushy Muddy and turned green overnight.
[Actually, our own Stacy Conradt discussed Oscar's color switch last year. For more Muppet tidbits, check out "The Stories Behind 20 Muppet Favorites."]