I saw that by accident... I'm not a fan of Craig Ferguson, but he's on like right after David Letterman (whom I AM a fan of), and saw that he was going to have Alan Alda on the show that night, so I was watching for Alan Alda, and then next thing I know, here's Oscar the Grouch, making Craig a legal citizen of Sesame Street.
It was a pleasant surprise, I'll give you that, but I think it's better when Jimmy Kimmel has Muppet guests on (ala Grover and Fozzie Bear).