I can loose my mind on a Sesame Street theme. There are soo many ideas that go with a sesame street party. Elmo was my very first party I ever did. My oldest daughter was turning two, and she loved Elmo. So from somewhere I don't know where, came all of these ideas, and creativity. Up until then I had not a creative bone in my body. At least not for childrens parties.
If your child is only into one or two of the characters then just do those two and maybe have some of the other characters in unsuspected areas such as the bathroom. The kids will love it!
Decorations
Search Amazon.com for sesame street party supplies
Every party must have a fun entry door. This gets the little guest excited. Seeing a fun doorway means there's something fun going on, on the other side. So if the guest have to go through a door before entering, Decorate the door very festive. One example would be, attach a red background using wrapping paper or bulletin board paper. If you are good at drawing simple characters, draw the heads of all or most of the main characters using either posterboard or construction paper. Or you may also purchase sesame street cutouts if you are not a good artist, and arrange them all over the door. You can also add cut out balloon shapes, with dangling curling string. You my also add "Welcome to
(childs name) party", "Come on In" or "It's a Sesame Street Party!"
Inside the party area you can of course have helium balloons in Sesame Street colors (red ,yellow, blue and green). Tie about 3 in a bunch and different heights. Make paper weights to tie the balloons to. Use the same color scheme when using crepe paper (streamers) and tape to the corners of the walls where wall meets ceiling. Make an "x" shape or you can take it from one corner to the other in the shape of the room, normally a square shape.
For the walls you can make more heads or bodies and tape them all over the room. I know when I did my daughters Elmo party, I taped Elmo all over the walls and had each one saying something like "Elmo so happy to see you", Elmo thinks you're sweet" or "Happy Birthday
(b-day child)"
If your child only like 1 or 2 characters, You can make the other characters peeking from behind a couch, a table, or a television. It will be like they wished they could have been invited.
Use your childs Sesame Street toys for decorations also. Place them everywhere. If this is a party where the little guest are too young to play actual games or if you are going to have some guest there that may be younger than the birthday child, I suggest a fun play area. If you have a small toddler pool, fill it with plastic balls, have some toddler toys out, puzzles, blocks, noise makers and more. You can even decorate this area with streamers and small balloons. This will the keep the younger babies/children busy. You could also have a small television in the play area, where they can watch a Sesame Street dvd.
Cardboard boxes are always a hit with toddlers. If you or someone you know can paint one of the Sesame Street buildings it would make a huge difference in the room. With the cardboard you can even make giant cutouts of the characters. Either of these would be a great spot for each guest to take a picture in front of as a party souvenir.
For the party table you can use Sesame Street tablecloth or a plain color like red, yellow, blue, or green. A big Sesame Street toy, stuffed animal or the cake can be used as the centerpiece. Sprinkle confetti all over the table. Small Sesame Street happy meal like toys can also be added to the table. Place the party ware on the table and you are set!
growin g up. Nobody ever knew about it. I surely wasn't going to expose my crush to anyone exspecially with it being a cartoon character. To be honest it was something about the way he could actually stick to the side of a building, lol. Seriously I remember always thinking "how is that possible"...I'm in love". I think because I didn't know, was the reason I was in love, don't ask. 
or you can make your own with a blue or red tablecloth, if you can find some spider webb sheer like material, place on top of the tablecloth. 