Uncle Fester's Toupee - S1-E31
Other mistake: Bad editing shows up a couple times in this episode. Once when Max goes to ring the doorbell. As he reaches for it, it moves out and in on its own and he moves with it. As he does, its easy to see the film is run back and forth. The second time is when he reacts to the news of Kitty. He flinches, and his toupee slips over his face, then the film is run backwards so it goes back.
Answer: Basically from what I understand, they stuck the innards of a small flashlight into the base of the bulb and put a little switch on it. When he put it in his mouth and bit down, his teeth would hit the switch, which would turn on the flashlight and made the bulb light up.
TedStixon