NOTE: The videos below are not for the squeamish. Although it's an illusion, it sure looks real.
"Let's talk geek," says Harry Anderson as he starts his magic act about what circus geeks did. This was in 1986, as part of his Hello Sucker TV special. He proceeds to explain that he's going to show a trick in which he appears to stick a needle through his arm, fake blood and all. "When you see the needle through the arm, you know that it could really be happening, and that's what makes it different. It could be happening. It ain't! But it could." When he pulls out the giant hat-pin, we start to worry.
Harry Anderson is probably best known for his role on Night Court, but he's also a terrific magician. In this clip, you see his acting ability on display as he hams up this trick, really selling it. This looks super-real, but it isn't. You've been warned. Okay, now check this out, then the next video will show you how it works.
So how does this work? How can Anderson be sticking a needle through his arm, and then a second needle, and have "blood" coming out, but seemingly not suffer pain from the experience, nor have a puncture wound afterward? Well, there are a few ways to do this trick (and Anderson's definitely relies on that towel...note that he's clearly applying something and then removing it, taking his time with the towel by telling jokes), but here's a simplified version:
You don't need CGI to make gross effects.