Yeah, this is pretty much as dorky-cute as you'd expect if somebody told "Hey! Elvis Costello sang a parody of one his classic hits with Elmo from Sesame Street!" Actually, amidst all of Declan's mugging, I think I actually prefer Elmo's backup singing ("a-oh!"). It's been floating around the interwebs for awhile, so you may have seen it already, but if you haven't, it's definitely worth your time. If I have to explain the reference, then you're probably not gonna appreciate the video anyway.
Elvis Costello (w/ Elmo) - "Monster Went and Ate My Red 2" [YouTube]