At the beginning of the episode, you see Lex talking to someone in the Police Van, but no one's there. So you're automatically thinking: either there's a Ghost in the van, or he's gone crazy. Which, of course, you don't rule out entirely. Then you find out that he's really talking to Brainiac, so you're thingking now: ...Yep. he's definately gone Koo-Koo for Cocoa Puffs.
Or... may be it's even crazier than that and when Braniac fused himself with Lex's body,a part of Lex's mind got permanently melded with Braniac's, making it like Lex is having two minds in the same body, which would explain why he's talking to open space... still, it would be fun to say that he's just finally lost it, but then there probably wouldn't be anything for this season worth watching, other than all the couples you want to hook up finally hooking up for once...
By the way, Shayera really is like Wally's big sister, what with that stunt she pulled on him and Fire on the plane... :D Now that was funny.