I really like how Larry David has the courage to tackle topics like racism and racial stereotypes in situations that frequently teeter on the edge of offensiveness. This episode has an examination of how a black/white man is perceived if they are wearing a bow tie. I think larry walking into the office to say "you ARE a muslim," walks that line. I like sherriff, and i hope he becomes more of a presance as the season moves on. You can see how he's still using these early episodes to give story information about events that will be happening later in the season, how he's setting up jokes that will be paid off later, and i can forgive the less than total hilarity of this episode as a debt to be repaid later.
the lesbian subplot was also very close to my heart. I loved the "friend o the lesbians" line. In all a very good episode just a bit of comedy sacrificed for story.