The main thrust of this issue, besides the whole "setting up the bad guy" thing, is the Justice League taking on some worthy adversaries. Good - disaster relief and sitting around blowing up asteroids (War World) isn't why we want to watch their exploits. Watching them take on the bad guys was fun and interesting. There were also a few setups to part 2 - the not-so-subtle claustrophobia for Hawkgirl, and the more-subtle Flash's feelings-of-uselessness. Granted, he probably should have been more powerful against Luminus, but oh well.
It was also nice to see a few more obscure villains from the other animated series - Luminus, Firefly, Volcana. The overkill of villains at the beginning in the dream sequence seemed a little much, however - do a lot of people really know Simon Stagg was a villain? It's a nice "cameo" scene, but a little bit of overkill.
Dee's origins and creation of Dr. Destiny makes a bit more sense here - like the fact his skeletal appearance is merely a dream-appearance and not how his face and skin eroded away to in real-life in the comics. We get a little bit of how he was driven to become a villain, although his hatred of the League remains unexplained until Part 2. Which is good - all we needed here were hints but hints that were picked up on in part 2.
William Atherton makes a suitably creepy voice-actor here, although getting Jon Cypher (Spellbinder in Batman Beyond) might have been interesting as well as he had much the same kind of schtick of immersing people in nightmare scenarios. We also get Eliza Dushku in a blink-and-you-miss-it guess spot as Dee's girlfriend (and who thoughtfully gets eliminated in part 2 so that they don't have to pay her extra :) ).
Basically this episode just sets the stage for the effective part 2, but it's entertaining in its own right.