In the Toy Story Theory of the Text, the toys/texts have lives of their own, which turn on when we readers are not around to play with them. They are intelligent, but in Toy Story Theory they are not fully autonomous -- that would be too easy. Their one abiding desire is to be read ("played with"), with affection.
[Update/ A Thesis of a Kind: Looking at the interaction between toys and children in this way, we see a version of the interaction of texts and readers, with some of the usual dynamics turned on their head. What I do below is not 'reader-response' criticism but, in some sense text-response criticism. Though of course, it comes back to the adult reader in the end, as it always must.]
Some time after the events of Toy Story, presumably the following summer, Andy rips his Woody doll while playing with him and Buzz. Woody is placed on the shelf, where he finds another broken toy, the penguin Wheezy, and begins to fear he'll soon be thrown away. When Wheezy is set out for a yard sale, Woody tries to rescue him, but ends up in the yard sale himself, where he is stolen by Al, an obsessive toy collector and proprietor of "Al's Toy Barn". Buzz and several other toys set out to rescue Woody.
The fictional world in TS2 exists in parallel with the 'real', human world, and has to continually interact with it. There are, in particular, two kinds of humans to contend with, Andy, the imaginative child who loves his toys/stories, and Al, the evil Toy Collector, whose only goal is profit. After Woody is abducted, he experiences his moment of Peripeteia -- not as dramatic perhaps as the famous sequence in Toy Story (i.e., where Buzz Lightyear realized he was only a toy) -- but still a powerful moment: Woody actually has a family he never knew about:
Woody is taken to Al's apartment, where he is greeted by Jessie, Bullseye, and the Prospector (an unsold toy still in its original box). They reveal to him that they are toys based on a forgotten children's TV show, Woody's Roundup. Now that Al has a Woody doll, he has a complete collection and intends to sell the toys to a museum in Japan. Woody initially insists that he has to get back to Andy, but Jessie reveals how she was forgotten and eventually abandoned by her owner as she grew up, and the prospector warns Woody that he faces the same fate as Andy ages. Woody agrees to go with the "Roundup Gang" to the museum. (Link)
When a blockbuster story comes face to face with its less successful peers, the initial response is confusion. Why aren't you as good a story as me? Social constructionists point out that stories with clear heroic lines are easier to digest than those involving figures like “Prospector Pete,” the sputtering, morally ambiguous protagonist of a depressing work of historical fiction. Deconstructionists take it a step further, pointing out that Prospector Pete, the old man in the box, is the essential truth of every text/toy: no toy is ever really opened. Feminists point out that Emily loves Jessie as much as Andy loves Woody. (And Chloe loves Olivia – note the intriguing homoeroticism of the child/toy bond!)
The endearing thing about the Toy Story universe is that it is aware of the constructedness of toy popularity, and it doesn't attempt to pretend that it can be undone by creating a world where there are no cool toys and Every Toy is Of The Same Value. What it does instead, by forcing the toys to band together in a small “nutty cluster” (Eve Sedgwick's phrase; she was talking about Dickens, but it applies here too), is suggest the power of a group of idiosyncratic personalities working together. It is only by working together, for instance, that the toys can drive a human-sized car (on which, more below).
“Japan” also plays an interesting role in all of this. The name stands in for pure commercialism, which might seem odd, considering this is a movie about commodifiable toys, which has as one of its aims the re-commodification of “Buzz Lightyear” and “Woody” toys in our real (human-humdrum) world. For the children whose parents have already shelled out $20 for the TS2 DVD, there will be another $30-40 to spend on further real editions of the simulacra they have already consumed.
But Japan is also an exotic, bizarro world where the toys that are forgotten 'here' – relegated to life under beds, on forgotten shelves, are enshrined as attractions in museums and worshipped like Gods. In a sense, “Japan” is the biggest and best stage these toys can possibly have. To go there, as Prospector Pete points out (in the movie – it's not in the synopsis above), means eternal life of the spotless kind, even if being sent there in boxes results in a kind of irreversible separation from the space of TS2.
Buzz and his friends search for Al at Al's Toy Barn, where Buzz gets into a scuffle with another Buzz Lightyear doll (who, like Buzz in the first movie, doesn't realize he's a toy), and the new Buzz sets off with the other toys for Al's apartment, believing it to be a genuine rescue mission. The original Buzz frees himself and follows them to the apartment.
When they get there, Woody tells them he doesn't want to be rescued and intends to go with his new friends to Japan, since he's now a "collector's item". Buzz reminds him "you are a child's plaything... you are a toy!" (ironically, Woody says exactly the same thing to Buzz in the first film) Woody is unconvinced and Buzz's group leaves without him. But Woody then has a change of heart and invites Jessie, Bullseye, and the Prospector to come home to Andy with him. The first two agree, but the Prospector locks them in the room, saying that the museum trip is his first chance (since he was never sold) and won't have Woody messing it up for him. (Link)
Prospector Pete is a story that is so proud of itself, it doesn't even want to be read. It simply wants to be seen, known about, admired, and “collected.”
Al takes the toys to the airport, where Buzz and his group manage to free Woody and Bullseye from the suitcase, and stick the Prospector in a little girl's backpack so he can "learn the true meaning of play-time". Jessie remains trapped in the suitcase, and Buzz and Woody ride Bullseye to rescue her from the plane's cargo hold. (Link)
This is my favorite part of the movie (actually both Toy Story movies) – where the living toys have to navigate the human world. They are too small, so they have to find creative ways to make the sensors on automatic doors notice their presence. (Living stories inhabit our world like ghosts, stymied by automatic doors that demand material, rather than imaginary, weight.)
And crossing a wide, busy street becomes a task of Scylla-and-Charybdean difficulty. In TS2, the toys hide under traffic cones that seem to move across the street of their own, mad volition. The toys manage to sneak across, but their little journey has led to a series of human accidents, and a massive traffic jam.
And then the strange, terrifying airport, and the toys jumping out of the baggage compartment of a moving plane, and .... oh, it's just too good, analysis fails me. [Perhaps we could say: overly bright, automated places like airports are Toy Story's version of hell.]
At home, the toys are greeted by a fixed Wheezy, who regales them with a concert. Buzz asks Woody if he's still worried about his eventual fate. Woody replies "it'll be fun while it lasts. And when it's all over, I'll have Buzz Lightyear to keep me company... for infinity and beyond." (Link)
And this is perhaps the real point of Toy Story Theory, the painful anagnorisis that all sentient toys/stories must experience before the credits roll: just as every toy is eventually going to be put on the shelf and put away, every story has a shelf-life in the mind of its reader, and must die.
Eventually the reader will “grow up,” which is to say, she will fully absorb the pleasures and possibilities of the fictional world embodied in both toy and story. She will want to go somewhere else, and have a different kind of experience.
In TS2, it is implied that the grown up “Emily” (and presumably also “Andy) give up their toys in favor of things like record players and telephone. They give up their toys –which have narratives attached to them (like Mr. Potato Head's “angry eyes”), for "cool" objects that don't have any kind of inherent narrative association.
We often joke that our gadgets (cellphones, cameras, etc.) are “toys,” but actually they aren't toys in the Toy Story Theory, not even remotely. They are objects or tools, elements perhaps, of things that can become narratives, but they don't take us anywhere by themselves. Though the conceit of Toy Story is the idea that a child's toys are actually alive, the living world of the toy/story is contrasted to an adult world constituted by affectively detached objects -- narrative dead weight.