With so many stand-alone episodes during the first half of this season, it's about time that the writers returned to the season arc. This particular episode does shed some light on some key elements of the story, which is a very good thing, but it also seems to be simplistic in approach. There's a lot of running around for what little ground was gained.
In essence, the leader of the Alt-universe super-soldiers, Mr. Newton, is trying to open a doorway linking Fringe Prime with Alt-Fringe. This would be a very bad thing, and Olivia is supposed to do whatever it takes to prevent it. As it turns out, Walter is the only person in Fringe Prime with the knowledge of how to create a doorway, and those memories were intentionally taken away from him. Mr. Newton fulfills a plan to restore those memories just long enough to get his answers, and Olivia chooses to save Walter rather than stop Mr. Newton and end the threat.
That summary doesn't quite do the episode justice. For one thing, the method of memory restoration is interesting, because it implies a mechanism for memory that doesn't quite mesh with how memory and consciousness has been handled previously on the series. Memory and consciousness have been a bit more ephemeral in previous episodes, implying that both are not necessarily linked to a physical anchor within the brain.
In this case, however, it appears that William Bell was able to excise small portions of Walter's brain, thus removing Walter's ability to access certain key memories and associations. The question is: does this imply that the information itself was held within those chunks of grey matter, or that the chunks removed were necessary for access to the information? Considering that the series is as much about consciousness and perception as it is about monsters and alternate realities, this is not an idle question.
We also get some insight into Walter's past history. It seems very clear that Walter's decision to open the door into Alt-Fringe and abduct Alt-Peter was a trigger point. It was the first such incursion, according to Mr. Newton, and I still believe that the abduction triggered a response from Alt-Walter that led to the war that has been heating up since. We have yet to see what kind of man Alt-Water might be, but there have been plenty of hints that the pre-psychotic break version of Walter Prime was not someone to cross. If Walter Prime had been advancing his "fringe science" all that time, who knows what kind of disturbing tech he would have created!
That leads to another interesting possibility. Was Walter's mental collapse really all that it seems? Did he really lose his mind due to the death of a student? I don't recall that the details of that incident were ever provided. The surgery conducted by William Bell on Walter could have further degraded his mental state, but it's also possible that Walter's original condition was engineered by Bell as well. If Bell was that concerned about the potential for Walter's knowledge to be discovered by the enemy, eliminating that threat (while keeping Walter intact enough to be a potential resource later) would fit Bell's apparent pattern.
Just as there were strengths to the episode, however, there were some inherent weaknesses. The first problem is something that might be explained later, but now stands as a glaring contradiction. If the soldiers of Alt-Fringe managed to cross over into Fringe Prime before, why do they need Walter Prime to tell them how to open a doorway back into Alt-Fringe now? The timelines still don't quite add up for me, though I will give the writers some slack and time to explain away the apparent discrepancies.
More directly problematic within the episode, however, is Olivia's decision not to take down Mr. Newton when she had the chance. I'm not talking about her decision once Newton made it clear that it was a choice between him and Walter; I'm talking about the moments before that. Why didn't Olivia just shoot Newton in the head and be done with it? It's not like Newton is technically human anymore, and she knows the potential threat that Newton presents. Capturing him, rather than eliminating him, feels like a plot contrivance, designed to ensure that the plot thread remains viable until the intended point of resolution.
Granted, the pieces of the "Fringe" puzzle haven't always fit together in the most elegant manner; the first half of the first season seems a bit disconnected from the superior second half, after all. And I accept the limitations of the scope of the plot for what they are. I just feel like the writers aren't quite sure how to get from point A to point B, and as a result, the seams are starting to show.
If the previous examples don't prove the point, I can give one more. I noted in the review for "Snakehead" that the writers would need to use Walter's decision to implant a tracking device into his neck for something momentous to mitigate the otherwise isolated nature of the episode. So I was a bit annoyed to see it used as a red herring of sorts just one episode later. It's the sort of thing that could have used a little more forethought to give it more dramatic impact.