Given the similarities in comic sensibility between Larry David/Jerry Seinfeld and Woody Allen (not to mention the fact that Larry has had minor roles in a few of Woody's films), it was only a matter of time before the quintessential New York director was in some way involved in the making of an episode of the ultimate New York TV show. The episode in question is the borderline genius The Alternate Side, which continues the series' tradition of bringing out the best (read: worst) in the personalities of Kramer, George and Elaine.
Allen's role in the plot is minimal, in fact he doesn't appear at all. It is just mentioned that he's shooting his latest movie (which would have to be Husbands and Wives, given the air date of the episode) not so far away from Jerry's apartment, and Kramer is lucky enough to get a small speaking part in the film. George is less thrilled by Woody's presence, given the film crew's presence prevents him from doing his job well (he's supposed to make sure no one parks their car on a certain side of the street on that particular day and move any vehicle that inadvertently breaks the rule). Meanwhile, Elaine dates an older man and ends up in trouble when the latter has a heart attack, and jerry, staying in motor-related territory, has to deal with the theft of his car.
The Alternate Side, apart from merging two comedic universes (Allen and Seinfeld), is one of the highlights of Season 3 for how it uses Jason Alexander and Julia Louis-Dreyfus is some exquisitely absurd situations (as usual, George is the king). It is verbally speaking, however, that the episode scores its biggest triumph, with Kramer's deliberately pointless movie line: "These pretzels are making me thirsty!". Just like Kelsey Grammar, who was given bad lines on purpose by the writers of Cheers to see if he could make them funny, Michael Richards turns that nonsense into an instantly quotable Zinger, which rightfully went on to become one of the show's most enduring catchphrases (and this, worth noting, was before the fourth season made Seinfeld a nationwide hit). Those pretzels, indeed.