From Monkey Island wiki
Little Guybrush is a small puppet controlled by Hellbeard. He spends most of his time trying to talk to his companion Little LeChuck, who responds with answers like 'sheep', 'booty' and 'grog'; Little Guybrush is patient, though, and encourages Little LeChuck to continue.
If Guybrush approaches Little Guybrush will hide so that no more than two people are visible. When he emerges, he will reveal that he thinks that Admiral Casaba is a paranoid jerk and also calls him stupid. He will reveal to Guybrush that their puppeteer Hellbeard, though once an immensely fearsome pirate, is the last survivor of the Ultimate Insult wars of many years ago, and as a victim of the Insult is now very meek and non-violent. If Guybrush asks, Little Guybrush will retreat so that Guybrush may speak to Hellbeard.
After Hellbeard flees Guybrush can use his puppets to draw Admiral Casaba's attention to the rocky beach, where a cannon explosion will reveal a buried treasure.