YEAHHH Paul Williams! The best Muppet music is always Paul Williams---TMM, Emmet Otter, MCC... He just gets them.
But I have to agree that I think the Muppets are definitely still current. The only thing that makes TMS/the movies feel dated is the guest stars. And sometimes Piggy's hair. Aside from a few jokes (I had no idea what the Hare Krishna jokes meant when I was a kid, for obvious reasons) the movies and the sketches on the show are timeless and just as accessible to people today as they were in 1975. Mahna Mahna? Java? Happy Feet? And as someone earlier said, the classic trilogy of Muppet movies are all riffs on very popular--and still relevent--genres: the buddy road movie (recent example: Harold and Kumar), the caper (Get Smart), and the underdog-succeeds-in-its-dream movie (Ratatouille).
And this just jumped into my head, but if Paul Williams is a no-go, maybe they could get the Avenue Q guys to write the songs for the movie. They would probably work really well with Jason Segel/Nick Stoller and they still know how to right heartfelt numbers (but you know, although it's beautiful There's A Fine, Fine Line can't compare to I'm Going to Go Back There Someday in any way, shape or form).
Just thoughts. Still excited!