In the last two episodes before "Letters of Transit" ("The Consultant", and "Everything in its Right Place"), Peter and Olivia were together and an established couple. Peter was with the right Olivia from his universe as previously stated by September. So I am a little confused about your thinking that Henry should not exist and Peter never got with Bolivia. "Letters of Transit", should have been chronoligically after "The Consultant" and "Everything in its Right Place" but fast forwarded into the future. Also, Peter was never with the Olivia from the Red universe in this timeline. When he popped back into existence, nobody in the Red universe really knew who he was.
This is definitely a universe we never saw before where the Observers were walking the evil side, the resistance was failing, William Bell was alive and working with the Fringe team, and the major players of the Fringe team was either dead or ambered.
Im with Kat, Im sorry historlover but your post does not make any sense to me.
Henry was the baby of peter and fauxlivia not peter and olivia. As Peter was wiped from existance, when Fauxlivia came to this universe, he did not sleep with Fauxlivia and therefore henry was not concieved. Now Peter and Olivia are together when they concieve a baby it will not be Henry. Its a different time/place. Henry has ceased to exist. They could quite easily have concieved Henrietta already, we also know pregnancies can be sped up (Henry) and she could just as easily have a baby before the end of this season. Season 5 will air in 2012 and therefore henrietta could also be born then making her 4 in 2016. William Bell was shown for a reason, i am certain that Bell is not dead but the team just think he is currently. I reckon its our universe, i dont see why they would show us yet another universe with just 16 episodes left of the series. I have always found the observers menacing and slightly evil, especially the older one. the observers take over in 2015 and lots can happen in the fringe world in three years.