Season 3 has been Phoebe's season in many ways, perhaps leading to Shannen's exit, and though at first glance this would appear to be a continuation of that, this episode is actually more about Piper.
This episode prepares Piper for the start of Season 4, when she will be the head of the Charmed Ones and the most powerful witch. At the beginning, she is still paralyzed with fear of her new power with Leo trying to coax her out and build her confidence. By the end, she will take on the responsibility of finding the banshee and saving her sisters.
The pre-intro scene with the first appearance of the banshee is one of the darker and more chilling scenes in the series. In usual Charmed fashion, much of the darkness surrounding the Banshee is juxtaposed against a more lighthearted subplot involving Prue being a dog. Like many reviewers, I was not taken with the whole dog thing, but I can get over it. It mostly kept Prue out of the picture so we could focus on Piper and Phoebe. The entire Phoebe/Cole story line is just getting tired at this point. Obviously, Phoebe needs a job so she can have something else to think about. The story line will reach the apex of tedium in the next episode before getting a miraculous and much needed revamp in Charmed Again.
The highlight of the episode is clearly Piper and Leo's facedown with Cole, with Cole edging closer and closer and finally resorting to outright threats. Very tense scene with Piper showing her courage and determination before Phoebe arrives for her throwdown with Cole.
Solid penultimate episode that sets up Piper, Phoebe and Cole for the finale.