Apparently, creators Matt Stone and Trey Parker had been informed several weeks ago that they were not allowed to show images of the Islamic prophet in the show, so they decided to protest the decision in their own way.
The episode in question, "Cartoon Wars part 2", uses Fox's "Family Guy" as a means to get the point across. In the South Park reality, "Family Guy" is set to air an episode featuring Mohammed, which causes the Colorado town inhabitants to panic in fear of terrorist attacks. Cartman and Kyle set off to the Fox headquarters – Cartman to talk the president into censoring the episode, because he hates "Family Guy" and wants to take if off the air, while Kyle tries to stop him. As it turns out, the "Family Guy" writing staff is actually a group of manatees. Cartman, with the help of a Bart Simpson-like character, tries to threaten them, but unfortunately for him, they're the only animals not afraid of terrorism.
In the end, Fox's president is persuaded by Kyle to air the episode uncensored. In the South Park world, the prophet is shown and it prompts an animated response from Al-Qaeda, but in our real world, a notice is shown instead of the scene: "Comedy Central has refused to broadcast an image of Mohammed on their network".
In this episode of the show, "Family Guy" is used as a stand-in for South Park itself and the argument between the cartoon's creators and the TV network execs. Mohammed has actually appeared on "South Park" before, with no problems, in "Super Best Friends" when he is part of a superhero league, together with Jesus, Krishna, Buddha, Joseph Smith, Lao Tsu and Moses. Then again, the episode in question aired before 9/11 and before the Danish cartoons scandal.
Comedy Central's explanation was… actually it wasn't. A statement from the network only said that: "In light of recent world events we feel we made the right decision."
William Donohue of the conservative Catholic League for Religious and Civil Rights ranted against Stone and Parker for the Jesus bit, and nothing more: "Like little whores, they'll sit there and grab the bucks. They'll sit there and they'll whine and they'll take their shot at Jesus," he said.
