Yeah, it was an illustration, not a photo. Each character is in a different square on the towel. What was most disappointing was not the image, but rather the fabric it was on. It's more of a child's towel than a really nice, big plush beach towel that the Muppets deserve. Nice to seem them in a major store like Wal-Mart though.
Just checked out your site and it's coming along nicely. Keep up the great work.