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I know the only reason anyone loves the muppets is for music. However I think the rapid slapstick dialogue (even if occasionally cheesy) brilliant cameos, and more than engaging stories put them among the front runners of all movies. I would prefer to watch the motion of a muppet to any animated figure (and even to many actors) and I think Kermit is one of cinema's greatest protagonists. I prefer Caper only because of the story, I actually think that the emotional journey of The Muppet Movie easily makes it the superior film.
The Muppet Movie represents a journey, an emotional quest to find... well, as Kermit puts it "The Rainbow Connection" along the way the gang finds humor, Bob Hope, Music, Orson Welles, Beautiful sets like old churches, and wild western towns (and in fact all the sets rolled into one fake movie set, that somehow seems better than all the others), snappy dialogue, and even Steve Martin! This is one of those movies that really makes you believe in a place over the rainbow. Then again some people would rather go to New York to get into public television.
I'd probably call these the two best Muppet Movies (Well, A Muppet Christmas Carol is probably up there too). The Muppet Movie gets the win, but only just barely.
MOVIE has more heart. CAPER has more laughs. Plus, I dig capers.