Easter egg: On Disc 4 of the Complete Fourth Season, select the Extras menu for Krusty Gets Kancelled. On this menu, press '35', 'Enter' and a pencil will appear in the bottom right corner. Press Enter to view some secret sketches from the episode. (Note: on some remotes, to enter '35' the +10 button may need to be pressed first.).
Easter egg: On Disc 3 of the Complete Fourth Season, select the Extras for Marge vs. the Monorail. On the episode screen, press '1' then 'Enter' on the remote, and then '50' and 'Enter' (some remotes may require the +10 button to be pressed for this). A microphone will appear in the bottom right corner. Press Enter to view the episode with a secret second commentary.
Easter egg: On Disc 3 of the Complete Fourth Season, select the Extras for Homer's Triple Bypass. On this menu, press '2', 'Enter', '40', 'Enter' to make a pencil appear in the bottom right corner. Press 'Enter' to view some secret sketches of Homer. (Note: for some remotes, to get the '40' the +10 button may need to be pressed.).
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.