Shown with the original theatrical release of Toy Story 3.
The characters are all hand-drawn, old-style 2D animation, but the inside the characters is computer animated. PIXAR's second hand-animated 2-D film, the first being Your Friend The Rat.
The wolf inside Night's "window" is a modified version of Alpha and the lumberjack chopping down a tree is Tom- both originally seen in Up.
The show Day is watching is the Thunderbolt Show from Disney's 101 Dalmatians film.
According to Production Designer Don Shank:
I am very excited that the public will finally get to see it because it's unlike anything Pixar has produced before.