ON his final “Tonight” show, Conan O’Brien said walking away instead of accepting a demotion is the hardest thing he’s ever had to do.

Despite the rancor that led to his US$45 million buyout, the red-haired comic urged fans not to be cynical and said their support made a sad situation “joyous and inspirational.” He thanked his viewers and even thanked NBC for more than 20 years of employment but not before getting in a few final jabs during an earlier monologue.

O’Brien, who keeps a collection of guitars in his office, strapped one on to join Will Ferrell, ZZ Top guitarist Billy Gibbons and Beck for a raucous rendition of “Free Bird.”

O’Brien will be replaced March 1 by the man he took over for seven months ago – Jay Leno. In the interim, reruns will fill the slot, followed by Winter Olympics programming next month.

Faced with the flop of its prime-time Leno experiment, NBC sought to move him back to 11:35pm and asked O’Brien to move “Tonight” a half-hour later, past midnight. O’Brien refused, opening buyout negotiations that ended early Thursday, and triggering a remarkable period of late-night comics taking brutal shots at NBC and at each other.

Despite his sense of loss, O’Brien told fans yesterday that “I really feel this should be a happy moment.

“Every comedian dreams of hosting the ‘Tonight’ show and, for seven months, I got to,” he said. “I did it my way, with people I love, and I do not regret a second. I’ve had more good fortune than anyone I know, and if our next gig is doing a show in a 7-Eleven parking lot, we’ll find a way to make it fun.”

Although, he quickly added, “I don’t want to do it in a 7-Eleven parking lot.”

Earlier, he showed a package of clips from his seven-month stint, including the mock run from New York to California used on his first “Tonight” show, and ended it with a placard saying “To Be Continued.”

His future is uncertain. Fox has expressed interest in having him do a late-night show, but the network is checking with its affiliates to see if they would support it. Under his exit deal, O’Brien is free to start another show after September 1. He’s not allowed to give interviews or make other television appearances for three months.

Tom Hanks joined as a guest before dashing off to a telethon for Haiti. Steve Carell did a mock NBC “exit interview” and shredded O’Brien’s key card. Neil Young sang “Long May You Run” and thanked O’Brien for supporting new music.

During his monologue, O’Brien tossed around a few ideas about what NBC might do with the studio it constructed for him when he moved to California from New York in the middle of last year.

One suggestion: “Leave the studio cold and empty and rename it ‘the world’s largest metaphor for NBC programming.'”

O’Brien told the audience that “we have exactly one hour to steal every single item in this studio.”

As soon as fans had been let in the studio, workers walked around to unscrew and remove signs posted all over that said “Tonight Show with Conan O’Brien: Audience.”

Although NBC had sought to keep O’Brien, who hosted the 12:35am, New York-based “Late Night” for 15 years while waiting for his shot at “Tonight,” executives said the network was losing money with his show. O’Brien had lost half the audience that Leno had drawn in the time slot, slipping behind CBS’ David Letterman in the ratings. O’Brien’s managers said he needed more time and blamed some of the ratings troubles on the sinking fortunes of Leno and the local news programs that preceded “Tonight.”

Fans waiting to see the final show expressed their support. Three fans from San Diego put up a tent and camped overnight in the rain to get in.

“He’s just generally a likeable guy,” said Lesley Vamous, a fan from Australia. “I think that’s why I like him and I watch him. He seems like an approachable guy, and most of the things he does are kind of funny.”

Juliet DiFranco of West Toluca Lake, California, said she couldn’t watch Leno like she did before. “He just seems like such a jerk for not retiring,” DiFranco said.

O’Brien didn’t mention Leno in his closing statement, according to a transcript.

He asked his viewers not to be cynical.

“I hate cynicism,” he said. “It’s my least favorite quality and it doesn’t lead anywhere. Nobody in life gets exactly what they thought they were going to get. But if you work really hard and you’re kind, amazing things will happen.”