Speaking as someone who owns about 20 of the Noggin episodes, I think that the choice of format is going to be very, very important.
I watch Sesame Street for only two reasons - (a) to get my nostalgia fix and (b) to entertain and educate my preschool children.
Within that context, each format has its pros and cons:
a) Complete Episodes
pros: uncensored & unedited, preserves segment context
cons: too many episodes, too many "repeat" segments
b) Themed Compilations
pros: efficient space use, viewer can purchase what they want
cons: removes episode context, obsure sketches can be omitted
comments:
Having gotten my "nostalgia" fix when the Unpaved episodes came out, I now find myself hitting the FF button a lot when I show them to my kids.
Whether it's because of the boring live-action skits in the first few seasons or protracted filler like "driving around in Hawaii in a pickup truck" or "Buffy washing a baby for 7 minutes straight", there is much material in Sesame Street that isn't worth watching more than once or twice.
The flip side is the gems hidden inside these complete episodes that are consistently cut out by SW when they do their home video releases. Complete episodes seem to be the only way to guarantee access to censored characters like Roosevelt Franklin or erased actors like David or contemporary "yellow submarine" animation styles or 1970's archaic technology, clothing styles, and language.
Further, in both their home video releases and especially Play With Me Sesame, SW tends to edit & alter classic segments in ways that sometimes improves them (like the Frazzle segment in Elmo Says Boo), but more often makes them less appealing (like adding a babbling, dancing Grover in the background). I hope that they won't get the editing bug on these DVDs, but it won't surprise me at all to see more recent muppets and voices digitally added.
It's also apparent from watching something loud and fast like "Alphabet Jungle" or hodgepodge like "Sing, Hoot, and Howl" or strictly themed like the "Best of Ernie and Bert" that a big part of the charm of SS lies in the contextual mix of the episode itself. I can't put my finger on it, but somehow Ernie and Bert, for example, are a lot funnier when mixed in between non-Muppet content than when they are strung together in one large segment. (The worst offender in this regard was "Cookie Monster's Best Bites" where the format itself exposed just how one-dimensional his character was.)
Another problem with chopping up episodes into individual themed pieces is the problem of their short length. When I show my kids the Schoolhouse Rock DVD, I can't go to the bathroom and back before the segment is over and I need to pick something else from the menu. Many SS segments will be less than a minute long, so I can imagine the DVD menu being very large...
All in all, the best of both worlds will be to mix complete episodes with strings of themed material on each disk. I just hope that the "complete episodes" that they pick don't all turn out to be the ones most of us have already traded from Noggin (but you take what you can get...)
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