Principal Michaels is the principal from the School Assembly episode (Episode 99.6). The principal introduces speakers at 'Inspiration Day' and also has to contend with misbehaving students such as Brian.
The principal had recently left Mrs. Michaels for Mary Seymour at the time he introduces her as a speaker, however Mary sees their previous sexual relationship to be now one of just friends.
At the conclusion of the episode Mary performs fellatio on Principal Micheals and another man named Robert in order to determine which is the real Principal Micheals (in what can be see as a suck off ending).
In a twist, neither man was Principal Michaels according to Mary.