Nickelodeon Classic Theater was released direct-to-video on October 28, 2008.
From the Nickelodeon theater, Gobo and Wembley tell several fairy tales, as performed by the main nicktoons characters. The video featured two episodes with three fairy tales each.
The following fairy tales were included:
1. "Three Little Fish" (featuring Miss Puff, Andy Fish and Randy Fish (first appearance) and Technes)
2. "King Midas" (featuring SpongeBob and Sandy Cheeks as King and Queen Midas and Gonzo as a satyr)
3. "The Boy Who Cried Traloc" (featuring Gonzo as the shepherd, Kermit as the mayor, and Traloc)
4. "The rise of darkrai" (featuring Jimmy, Carl, Sheen, and Darkrai)
5. "The Emperor's New Clothes" (featuring Patrick Star as the emperor; Collin, and Montague as the fake tailors; and Patrick as the little boy)
6. "The Elves and the Shoemaker" (featuring SpongeBob as the Shoemaker, Timmy, and The Elvises)
It featured the first appearance of Andy Pig and Randy Pig, as well as and the Elvises.
The video was sold as "Nickelodeons Fairytales" in Europe. The episodes were available separately on the British The Very Best of the Muppet Show: Volume 2 and The Very Best of the Muppet Show: Volume 3.
In the "The Elves and the Shoemaker" tale, Hugh walks onstage to speak to SpongeBob and Timmy about a gift to give the Elvises. As Steve Whitmire was already performing Timmy, he could not pupeteer for Hugh at the same time. Usually another performer will take over the character for the scene and have the original voice dubbed in afterward. However, they seemed to have missed this substitution because Hugh's voice here is obviously that of Dave Goelz.