This episode did have a lot of funny little moments, between Frasier and Niles at the gay bar ("I'm begging you, please take me home!"), Gil's "support" when Frasier is inadverdently outed on the air, Niles being jealous of the attention Frasier is getting from the director, and Frasier's denial that his new friend thinks of the two of them as a couple. However, I think some of the other gay-themed episodes from past seasons worked a little better. (Such as "The Matchmaker" and "Out With Dad.") It was so obvious that the director was treating Frasier like a boyfriend, it was a wonder he didn't figure it out sooner. Also, the whole setup for Niles and Frasier going to the gay bar felt somewhat contrived. (Since when does Niles wear shorts to play Squash? And why were they walking home?)
Not related to the main story, but I didn't like that Niles blatently lied to Daphne about where he was going, and then we were never shown a scene with him fessing up to it. He's so ethical, it seems oddly out-of-character for him, even if he didn't want to listen to Mrs. Moon complain about her "female problems" all afternoon. Usually "Frasier" has its characters come clean at the end of an episode, and I find it hard to believe we're supposed to root for Niles lying to his wife. Perhaps they just ran out of time given all the other subplots in the episode.
Also, I didn't realize Roz's boyfriend lived *beside* the gay bar until after the episode was over! And unlike others, I didn't mind that Gil was seen going into the bar at the end. I feel like it still wasn't "conclusive" evidence - he could have just been checking it out. (No more conclusive evidence than any of his other behaviors, I think.)