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A hot air balloon consists of a large bag filled with heated air that is capable of lifting a capsule, usually a wicker basket, containing a small number of occupants. They have been in use since the 1780s and mostly used for recreation, but have served other purposes in warfare and scientific research.
In The Great Muppet Caper, Kermit, Fozzie and Gonzo are first seen flying in a hot air balloon, as the opening credits show up. After the credits are over, Fozzie asks how the movie starts, to which Kermit replies that they pull on a rope. Fozzie complies, also causing the hot air to go out of the balloon, which causes them to fall down into a busy street, leading up to the "Hey a Movie!" number.
As seen in the film, the hot air balloon has a variety of colors on it and a pattern to go with it - light green, purple, yellow, red, yellow, pink/green, yellow, red, purple and green. The whole sequence was shot in Albuquerque, New Mexico, famous for its annual Hot Air Balloon Festival.