It's first major hype came from a crappy animation someone made of a dancing banana (which is totally irrelevant to peanut butter and jelly, unless you put banana's on your peanut butter and jelly).
It became so popular Family Guy had Brian come in with a banana suit on singing the song to Peter, which also became really popular.
The song became such a hype that even local Pittsburgh radio stations and surrounding radio stations even started playing it every 15 minutes.
Now it's an overused song and animation that is seldom seen, unless you find one person on a board or site that has the stupid animation as an avatar.
Seriously people, this song is no longer funny, stop playing it, it was about 5 years ago, it's time to move on.
Me: NO! It's NOT peanut butter jelly time. The early 2000's called, they want their crappy song back.
Jessica: No, I can't. It's peanut butter jelly time.
Kim: Damn. Maybe next week when you get paid?
Jessica: Yeah. That'll work.