HIV/AIDS also has a much nastier stigma attached to it, from the media attention it received in the 80's as being a disease of sinning homosexuals and drug users, and much of that remains today.

It's important to remember that this character's main street will be South Africa's edition of the show, where HIV is very prevalant and dangerous, due to a lack of education and treatment. This is education - half the battle. It's also teaching children that a child with HIV (who, I can assure you, didn't receive it through consentual sexual contact) is still a child, just like them, and not subject to exclusion and mockery.

Leaving such education to parents is often a dangerous suggestion, when parents of children of the age to watch Sesame Street grew up in the 80's with the AIDS scare and are either willfully ignorant of the truth of the disease, or just honestly don't know better. I think it's far more damaging to society not to bring these matters into the open - and again, it's important to remember how much more a part of life HIV is in South Africa than America.

Diabetes, to cover your example, doesn't have the stigma of being a "dirty" disease. It's not seen as something that bad people get from doing bad things. HIV is. Acceptance is a lesson we would all do well to be reminded of once in a while, and Sesame Street has a long history of dealing with sensitive subjects in brilliantly unintrusive ways. Why not see it for yourself before jumping all over it?