So far this season has been hitting the mark consistently, the best introduction phase of a season since the first one. With the writers knowing the end point, they know where to place pivotal moments rather than keep it open until the audience has lost its patience. The flash-forwards have also recharged the series' momentum. Unfortunately this episode is a slight downturn because of some faults in plot points related to Kate, but the rest continues to build on the foundation for this season.
Kate's major problem, again, is that her story relies too heavily on her love interests. Take Kate out of the picture and Jack and Sawyer would still be compelling characters. Vice versa and she's lost. She has proven to be a good actress, so why can't we see her character with something substantial? She has a criminal past she was running away from, but it seems to be forgotten most of the time. However, this episode brings back those elements while adding a dynamic that should make Kate a lot more interesting.
The episode's title, an old slang term referring to a place where there is nothing good to trade, seems appropriate as several sides are trying to negotiate. Kate makes a deal with Miles, and ultimately gets little out of it, paralleled to Kate making a deal in her murder case in the future. Miles also tries to extort a fortune from Ben, but it clearly will be harder than Ben handing over some money. You could also use the survivors as a whole in a position where no trade will do them well: stay on the island and be at its mercy or leave and eventually succumb to massive guilt.
Kate's deal in her flash-forward is another situation. Although I've expected whatever got the Oceanic Six off the island eventually wiped Kate's criminal record clean, it would make more sense that she face her crimes in court since there was some time that Kate's mug shot would probably be in many major newspapers while the plane was missing. However, it seems that Kate, who would likely face a capital murder charge for her father, gets off with a slap on the wrist.
Kate's story has two problems going against it: the legality of her trial and the circumstances that lead her to believe she isn't pregnant. Besides the more detailed elements of law (which I have no authority to speak of), why is Kate being tried in Los Angeles? She killed her father in Iowa, got her sweetheart killed there as well and robbed the bank in New Mexico. It's possible that her lawyer felt she couldn't get a fair trial in either state, but being in LA reeks of plot convenience since Jack lives there.
The second big problem's resolution feels a little sloppy. It's understandable that Kate is apprehensive about being pregnant, especially on the island that tends to kill those expecting. Of course the flash forward reveals her "son" isn't biological, but on island, she has no reason to know definitively she isn't pregnant unless she took one of the pregnancy tests. There are other indicators that she wouldn't be, but they don't even hint to them happening.
Jack's testimony serves a little more of the mystery of the Oceanic Six's back story. Originally there were eight survivors from the plane which crashed in the water, which is already a big shift from the truth. Kate served as the leader (which would've been the original premise of the series had Jack died in The Pilot as planned) until they were rescued. Everything besides their specific survival was manufactured.
So their story involves two characters dying. Some theorized that the two people who "died" are still alive, but being protected by this cover. For some reason, the Six or those who "rescued" them want to create the impression that they're dead for the rest of the world. They may be unable to protect themselves or are living covertly (Sayid wouldn't count as he is one of the six).
Locke's authority among The Others 2.0 is eroding faster than Ben's did towards the end of last season. Locke has a fit after Ben points out how lost Locke is without some island force guarding him. The last time he had a fit like this was in "Maternity Leave" when Ben under minded Locke's position within the castaways. With him lost and his word disregarded by his followers, he's desperately trying to assert his power and often making rash choices because of it. Obviously the big example is his interrogation of Miles, where he stuffs a grenade in his mouth to get information out of him. Considering the cons, it wouldn't be hard to believe that the grenade isn't active, but making consequences that extreme mirrors Ben's actions just as he fell from power.
Miles' reason for wanting to see Ben so badly is revealed. Considering his pocketing of the money from the kid's house in the flashback, that he would extort Ben out of $3.2 million isn't hard to believe. The Others have a lot of resources off island that would require a hefty bank account. The amount is odd, as Ben points out and he doesn't offer much beside an ambiguous facial expression as to why Miles picked it. There does seem to be meaning to the amount, but what it is is just another tease to spark fan discussion.
Another in the series of red flags the freighties have been giving off is the survivors' inability to contact the freighter's original line. In the last episode they hinted at problems inside the freighter with Frank reminding Daniel to hang up if Minkoswki answers. So there are some clear problems within the freighties community as higher management has a different agenda than everyone else.
Last episode showed a time discrepancy from on-island to off-island. So it would make sense that Sayid, Desmond and Frank's trip to the freighter would take longer than expected. One would have to wonder how long it took the freighties to get to the island to begin with. The writers have made a conscientious effort to avoid using explicit time tables so far, and that discrepancy with the payload hints at the problem with the helicopter.
Jin and Sun, who haven't been featured much so far this season, have a short scene worth discussing. Jin is preparing to head to America to raise their child, but Sun would rather raise it in Seoul. One thing not brought up is Sun's father, who sent a man to the airport to remind Jin that they'll never be free of him. It'll be hard to hide from Sun's father in Seoul if that's what they still plan to do.
There is also a hint that the child's paternity may be in question again, as Sun didn't respond to Jin's correction "our baby". In the mobisode "Buried Secrets", the relationship between Michael and Sun that never materialized beyond the first couple episodes is brought up again when they almost kiss. While that may be important again, it's probably best to leave the paternity subplot be rather than drag Michael into it.
With all the importance on Kate's "son", the writers set up the catch that there's more to the child. In retrospect, it should've been obvious that it wasn't Kate's long theorized child with Sawyer (unless you're still hanging on to the idea that Kate named her son after Aaron, which would've been a cheat), although some guessed that it was Aaron. Considering I was spoiled about last episode's Ben reveal, being unaware of this made it a welcome surprise.
Aaron being under Kate's care effectively dashes any chance Claire has of being one of the six. Some theorized she might've been killed, but I'm skeptical about that, mostly because it's dramatically richer if she's alive but separated from her child by major forces. Claire probably "died" in the cover story, with Kate taking over for mother as a way to boost her character standing off-island. It's possible that, as the Oceanic Six is keeping mum on the truth, Kate is protecting Aaron from the freighties' boss. It also recalls the warning the psychic gave Claire in "Raised By Another" that her son can't be raised by anyone other than herself and that perhaps fate had her on the doomed flight so she would have no other option but to raise him. This scenario could be the basis for a worthy follow through to the promises that early episode made.
Overall this may be the weakest episode so far, there's still a lot of solid material. More elements are being introduced as the season begins to gel, which should continue to compel viewers. Unfortunately Kate is still largely defined by the men she's attracted to, but at least they've set up the stage for bigger things.