jwz has all the details on the breast reduction that took place in the re-release of Knick Knack. I remember seeing Knick-Knack at a computer animation festival and at other animation tournees in San Diego and I do remember the original version. In fact, I think I have a VHS tape with the original versions from a Pixar short release.
How much of a breast reduction did the toys get? The screen captures tell the story best:
Again, the full details are available via jwz.