I think this was first one, from the first show. It's a two-parter where Kermit is trying to talk about the letter W, and a certain blue monster (who hadn't yet evolved into Cookie Monster) keeps eating parts of it, first turning it into an N, then a V, then an I.
The second part has Kermit with a new W, and no monster in sight. However, this letter W is rather uncooperative, Walking and Wiggling while the frog tries to lecture. When Kermit scolds it, it attacks him and beats him up.
It seems like you can always tell a first season sketch by that gray background. Am I right that it was only that color at very start?