First, let's get a few things out of the way. This movie is pure, unadulterated cheese. The tiny sets, the odd mixture of humans and Muppets in Victorian clothing, and the unapologetic cheer (see the choreography for "It Feels Like Christmas" as a prime example of all of these things) should spell disaster. Some of the songs, such as "When Love is Gone," seem destined to provide the audience with the opportunity to get more snacks or to use the rest room. Furthermore, on paper, the very idea of combining the Muppets, Michael Caine, and Charles Dickens seems destined for disaster.
And yet, despite these potential issues, it manages to work on so many levels. Not only is it able to bring a unique spin to familiar territory, it also manages to balance levity (usually in the form of Gonzo, who is standing in for Charles Dickens) with the story's more somber moments (if you aren't tearing up when the camera pans to Tiny Tim's abandoned chair with his cap and crutch, you are made of sterner stuff than I am). It sticks fairly close to Dickens's story and even uses a great deal of his language from the story. Furthermore, the movie avoids the pitfall of Mickey's Christmas Carol by taking the time to actually establish the characters. While it does typecast the Muppets, which is to be expected, it also is careful to provide a good understanding of the actual Dickens characters. The songs also add a great deal to the script. Although I fast forward through some songs on a regular basis, there are far more hits than misses in this film. "A Thankful Heart," "One More Sleep Til Christmas," and "Bless Us All" are incredibly catchy and really should be available through iTunes (just a suggestion).
In addition to a strong script and good songs, this movie also has Michael Caine, who makes a surprisingly good Scrooge. He does a good job interacting with the Muppets (which must be more than a little strange) and is able to make a believable transformation from miser to benefactor in less than two hours. Most importantly, you never get the sense of condescension from him and he actually seems to be enjoying himself. The casting on the Muppet end works well too; Kermit's character makes him an effective Bob Cratchit and including the two hecklers as Scrooge's former partners is a stroke of genius.
If you are tired of the endless airings of A Christmas Story or How the Grinch Stole Christmas (at least the Jim Carrey version), you may want to consider renting this and making it part of your holiday. Yes, it is a little cheesy, but what are the holidays without some cheese?