And being that he never appears on screen as the narrator, it’s not what the OP is asking for.
I should expand on that. It is my understanding that what the OP wants is examples of narrators appearing in the story that they’re narrating. Little Shop of Horrors and Into the Woods counts but not *Dukes of Hazzard and I don’t think Rocky Horror applies either. The Criminologist appears on screen but doesn’t set foot near Frank’s abode.
Which reminds me, how about the literary professor who periodically comments on the action in **Monty Python and the Holy Grail ** before being dispatched by an annoyed Sir Lancelot? (It always seemed to me that Sondheim lifted that part.)
A Muppet Christmas Carol is narrated by Gonzo (as Charles Dickens) and Rizzo; they appear onscreen, and briefly interact with other characters.
Lancelot may be the first of the K-nig-hits arrested, but he does not kill the history professor. The deed is done by an anonymous K-nig-hit.
Well, let’s hear your example, Mister “Rules” Cop! 
Actually, the OP says
So, I don’t see where he says the narrator has to be near Frank’s abode. So Nyah.
The Hudsucker Proxy manages to get THREE narrators: the main narrator, played by Bill Cobbs, is this omniscient janitor who interjects himself into the storyline and action, playing that ubiquitious contemporary movie ethnic stereotype, the helpful Mystical Negro. (“Strictly speaking, I’m not supposed to do nothin’ like this.”)
In the diner, there’s a scene where Jennifer Jason Leigh’s character tries to con the eponymous Proxy (scuze me if I sound pretentious, I just can’t remember who played Orville, or for that manner, who Jennifer’s character was) has her actions commented on by two bit players, with humorous asides like: “Enter the light lunch.” “Here come… the waterworks.” “Maybe he’s wise.” “He don’t look wise, Lou.”
Well, there’s the flea in the classic film adaptation of The Autobiography of a Flea. 
Luke is correct- I’m looking for characters who actually appear in form, not just voice, even though they’re almost never seen. These are some great examples- at least four of the movies I’ll be seeing eventually, and as for Into the Woods, I also heard that Our Town has a narrator who appears on stage.
The narrator in the Ed Gein-inspired movie DERANGED that in one scene actually sits on the edge of Dead Mom’s bed!
I just saw Disney’s Aladdin again and I think the Robin Williams-voiced peddlar at the beginning of the movie fits what the OP wants…he introduces the story but he isn’t in it, I don’t think (even though Williams also did the voice for the Genie).
Well, Geez - The Criminologist does actually appear in form, just not in the same location as the main action of the story that follows.
Therefore I still maintain that this example satisfies the conditions of the OP. Further, I feel that I would be a good fit for your organization and I look forward to hearing from you in the near future. Thank you for your time.
Isaac Hayes in It Could Happen to You
200 Motels. Larry The Dwarf (Ringo Starr, dressed as Frank Zappa, who does not speak or sing in the movie itself) is a character in the movie. Not sure if he counts so much as a narrator, but by gum it’s all surreal.
Also, I loved the Greek chorus in Mighty Aphrodite.
Most definitely, and he actually takes part as a couple of different characters too, the owner of the drug store (soda fountain) and minister at the wedding, to name two that come to mind.
Our Town has also been made into a film at least twice I can remember - Most recently with Paul Newman as the narrator/Stage Manager.
The shifting narators in Citizen Kane and the Bad and the Beautiful (Kirk Douglass, Barry Sullivan, Glen Ford and Lana Turner) would also qualify, at least in my mind. Each person adding a portion of the person’s life as it touched them and then the story would move on. For the latter, they are all sitting in a room discussing the Douglass character.
Another one that works, to a slightly lesser extent, is A Guy Named Joe with Spencer Tracy.
I don’t know about the movie because I haven’t seen it, but the play Chicago would definitely qualify. With the reporter being the narrator.
I could be wrong, but I seem to remember the movie the musical was based upon Roxie Hart had it much the same way. The reporter (John Payne or Rory Calhoun - I can’t remember which) told Roxie’s (Ginger Rogers - I think) story and very much ties into (more than in the musical) it in the end.
It’s a nit pick and a minor one at that, but Waylon Jennings did appear in a couple of the episodes as cousin somebody or other. One got the feeling that they could either give him a raise or let him appear in the program.
In the film version, the role is more-or-less covered by the piano player, though he takes a more ironical, detached, somewhat sarcastic stance (“Ladies and gentlemen… a tap-dance” before Billy’s summation). He interacts with the other characters in a few scenes.
In The Adventures of Baron Munchausen ( which I am sure to have mispelled) The Baron interupts a play about himself to tell a story about himself, and the line between reality and fiction gets a bit muddled. So the main character is the narator, and probably falls outside the scope of the OP, but I like to mention it.
There’s a silly movie called Mating Habits of the Earthbound Human. More of a straight-to-video type (after all, Carmen Electra is the female lead). The narrator doesn’t physically appear in the movie, but plays somewhat of a role in the premise – and it’s David Hyde Pierce (of Frasier fame), and he’s great in it.
There are also a few characters in costumes acting out some of the narration (okay, they are dressed up to represent sperm…) and they appear in the movie in an odd place – the main male character notices them in passing.
The premise is that the the narration is an alien TV show or something, educating the people about human mating habits (from an alien perspective, that knows nothing really about human culture) – a la Discovery Channel…