It's not faked, it's a screen that I pulled from a History Channel biography on Sesame Street.
Wikipedia isn't the best information source, but it's mentioned that he was orange in the 1969-1970 season in Oscar's article:
http://en.wikipedia.org/wiki/Oscar_the_grouch
The man with him is Bob (Bob McGrath) who has been on the show since it started. He will be 73 on July 11th and he's still doing it. When he dies, I suspect the world will get the best Very Special Sesame Street since Mr. Hooper kicked it. But with medical science being what it is these days, I'm willing to wager that Bob's got at least another 25 years in him.