Hopefully my ideas will make some sense ... the only purpose I see for a Sesame Street episode DVD project is to raise MORE money for PBS, Sesame Workshop, or Noggin, or whatever.
The way I picture it, there would be a catalogue that lists each episode, along with its description/lessons. The customer would fill out the order form and say which episodes they wanted to see (with a limit of four or five per order). No one would be crazy enough to want to see ALL 4000+ of them, so they'd just pick out the ones they thought looked the most interesting (Big Bird's Insomnia, SS Goes To Prison, etc.), or the ones that would be most beneficial to their family (#1839), or the ones they remember most, and of which they want to relive their memories.
The episode DVDs would be treated with care like food at a (good) restaurant ... they wouldn't be made until they were ordered, because no one wants to go to the trouble of making them all at once (see above posts). If the project were treated with the kind of care it deserves, they'd take a shorter time to make the DVDs than A&E did with the FREAKIN' BIOGRAPHY DVD THAT TOOK FOUR FREAKIN' MONTHS TO REACH ME!! .... whew, excuse me, just lettin' off a little steam. Plus, the more orders they get, the more money they'll get, and the more DVDs they'll be able to make and sell, and badda bing! It sounds like I'm going overboard, but hey, I've made SOME sense, haven't I?
Oh, and for the record - I think a single DVD would only fit TWO SS episodes.