When Mario and company defeated Grubba in his ultra powerful form, Macho Grubba, and took the Crystal Star from the machine, Prince Mush got his power back and hopped out of the machine. This allows him to reunite with Jolene (who had been aiding Mario as 'X' for a while).
In the files of Paper Mario: The Thousand-Year Door, it was said that Mush was originally going to be an optional boss fight for Mario after completing the chapter.
Prince Mush has magenta spots on his mushroom head, yellow hair similar to Jolene's, white shoes, and a blue sports outfit with white outlines. He always has a cheerful smile in game due to his short one time appearance.