What movie where he makes a cameo?

Don't know the movie, but you're right about audience reactions. There was a special about him on Biography and they mentioned that he was cast in a serious role as a lawyer in the movie "Flight of the Intruder". During test screenings, audiences would laugh and hoot as soon as he appeared on-screen for the first time. They ended up having to cut him entirely out of the movie.

After Married with Children, Christina Applegate had her own sitcom, called "Jesse", and Ed O'neill surprised her during shooting. When she opened the door she started crying because she was happy, and the audience too.

It's was not a movie, it was a blooper, is it what you're talking about ?

Deliverance.

link?

nevermind found it

His role is Deliverance, although brief, is rather important. He is the deputy assigned to watch over the character of Louis (played by Burt Reynolds), who is recuperating in a hospital. The Sheriff's office is suspicious over the disappearance of a local hillbilly, and the three survivors are trying to set a story to tell the local authorities. In fact, they had killed th missing mountain man, thinking him to be one of the two hillbillies that had assualted them earlier. When the character Ed (Jon Voight) speaks to Louis about the story they are composing, the deputy (O'Neil) becomes suspicous and tries to listen in on their conversation. Quite a poignant effort from O'Neil for a brief appearance.

So did they cut a hole in the floor for him to stand in?

Ed O'Neill wasn't in deliverance.