I think it probably varies, depending on way the scene is being shot (and where). I know they use special little low-to-the-ground stools on Sesame Street quite a bit - this was seen briefly on the A&E Biography special on SS.
Some productions use special puppeteering dollys which have a camera mounted on them and space for one or two puppeteers to sit. The dolly is then pulled on wheels or on a track down a street, allowing them to appear to be "walking."