Madonna kicked off the show at Radio City Music Hall with a poignant speech about her relationship with Michael Jackson, which began when she was a youngster idolizing the then-child star, then morphed into a friendship when both were at the apex of their careers, and later, grew distant.
Madonna lamented the negative publicity that dogged him in his later years.
"Sometimes, we have to lose things before we can truly appreciate them," said Madonna, dressed in black.
"Yes, Michael Jackson was a human being, but yes, he was a king," she told the celebrity-studded crowd, which included Michael's brother Jermaine and father Joe Jackson. "Long live the king."
The musical tribute began afterward, as Jackson clones dressed in some of his signature outfits recreated his famous dance moves from videos like "Bad," "Smooth Criminal" and "Thriller."
Then, as "Scream," his duet with Janet, appeared on a large screen, his sister came out to recreate the moves from their only video together as the crowd, including Beyonce, cheered her on. Afterward, she looked heavenward, and bowed.
It didn't take long, though, for the mood to change from bittersweet to just plain bitter. West - who has flipped out after losing at the VMAs, the Grammys, the American Music Awards and more - complained once again that the wrong person had been awarded a trophy, but this time, it was on behalf of Beyonce.
Beyonce, nominated for best female video for "Single Ladies," was bested by country and pop sensation Taylor Swift. The 19-year-old was giddy when she won for her clip "You Belong to Me," saying: "I always wondered what it would be like to maybe win one of these someday, but never actually thought it would happen."
But West ruined her moment when he jumped on stage, and protested.
"Taylor, I'm really happy for you, and I'm gonna let you finish, but Beyonce had one of the best videos of all time," he said, as a shocked Beyonce looked on and the crowd began to boo West.
A crestfallen Swift didn't finish her speech, but the crowd applauded her anyway. She later performed "You Belong to Me" in a subway station.
It was another wacky moment for the VMA archives, and a contrast to the tribute to Jackson. Jackson died in Los Angeles on June 25 at age 50. The medical examiner's office has labeled the death a homicide, and prosecutors are still investigating.
Jackson was not only an integral part of MTV's history - his legendary videos changed the way music clips were made and he was the first black artist whose work was aired on the fledgling network - but he also provided the VMAs with some of its most memorable moments, including his infamous smooch with then-wife Lisa Marie Presley, in 1994.
The Jackson tribute wasn't the only moment where Jackson's presence was felt. The network also aired a brief premiere of the trailer for "This Is It," the documentary about Jackson's preparations for his comeback concerts that were to be held in London. The film is due to come out in October.
Host Russell Brand also paid tribute to Jackson:
"Tonight is dedicated to the great Michael Jackson," Brand, in a top hat, told the audience. "Let's honor Michael tonight by loving one another in his memory."
Last year, Brand made his debut as host by poking fun at the Jonas Brothers' vow of purity, among other ribald moments. This year, he cracked jokes about Katy Perry's posterior.
Lady Gaga - who arrived at the show wearing a gold mask right out of "Phantom of the Opera" and Kermit the Frog as her date - gave a typically eccentric performance of her song "Paparazzi." It started off with Lady Gaga dressed in white, on the floor, and seemed to recall Madonna's famous VMA wedding-dress performance. But it soon morphed into bizarre imagery that included a bedazzled wheelchair, Gaga dancing with a crutch, and ended with her hanging as fake blood drenched her torso.
Beyonce and Lady GaGa led all artists with nine nominations each, but the show's winners are never as memorable as the wacky and wild moments, and noteworthy performances.
And the night didn't just focus on music: Robert Pattinson, Kristen Stewart and Taylor Lautner, the much fawned-over stars from the vampire film "Twilight," presented an extended trailer from the movie's sequel, "New Moon."