This show stands on its own in the series- there are no references to events or characters within it in any of the other episodes. Its sole importance to the overall story arc is that this is the one time we find out anything significant about Niko and her background.
Ariel is Niko's mentor in the "Circle of Thought", a loose society devoted to philosophy and mental pursuits- notably, those of psychic powers. Ariel herself uses teleportation to instantly travel to Beta Mountain and get Niko's help. (This leads to no little consternation from Cueball when some unauthorized stranger pops into his "ultrasecure zone".)
Ariel herself has great and open disdain for machinery- physical weapons, computers, or anything else of that kind. They're simply "primitive" and "useless." It becomes apparent that this is a sore point for Niko, since she takes such attitudes a bit personally as a Galaxy Ranger. Whether this rift existed before or after she left the Circle's environs of Xanadu for the Rangers is never made entirely clear.
The Megamind engages Ariel and Niko in a battle of wits and will. Ariel proves herself adept at outsmarting and tricking the Megamind, but the battle of psychic strength leaves both her and Niko close to losing. Niko's last trick that saves the day is a remote control that lets her release one of Zachary's bionic arm thunderbolts into the Megamind. Ariel concedes that Niko has made her point about technology proving useful- at least sometimes.
All in all, the most enjoyable part was the battle of wits and Alice in Wonderland scenery. The most important part, from a character standpoint, is that this explains a lot about Niko. Other than that, however, it was relatively unimpressive.
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