Overall this was probably up there with "The Substitute" as the best episode of season six so far.
A "perfect" rating is probably stretching it quite a lot, of course, but this episode was a big game-changer -- Jacob's forces are now in disarray, the temple is crushed, and sides have been drawn. Sayid and Claire have become consumed by The Sickness, and temple-protectors Dogen and Lennon have fallen at the former's hands.
The episode was skillfully paced; leading us gradually through a methodical build-up to an epic showdown at sundown. And when the showdown came, it was worth it. Lost doesn't often do action-sequences, and sometimes is unfairly criticised for it -- this episode demonstrates masterfully why epic-but-rare is far more dramatically satisfying than little-but-often. When Lost does action, it does it memorably. The final 10 minutes' action-piece of this episode sits alongside the incident (in the episode of the same title), the freighter explosion, the beach showdown with the others (in Through The Looking Glass), the hatch implosion, and several others, as another memorable and heart-pounding blaze of glory for the show.
The flash-sideways, comparatively, still move slowly and focus more on character enlightenment. It would be easy to mistake the purpose of the alternate reality to simply be a "Oooh look at what could have happened! Oooh, look what's changed!" scenario, but I think it's pretty obvious that there's far more to these stories than that. In this episode, on the island, Locke suggests to Sayid that if he follows him he will be able to see Nadia again... Perhaps the alternate reality is influenced by Jacob and his adversary; it's too early to tell. It is curious, however, that the two characters who have had flash-sideways who followed Locke at the end of the episode (Kate and Sayid) are still relatively miserable, struggling to find redemption and struggling to move beyond their previously-explored demons... A complete contrast to the Jacob followers (Jack and Hurley), who are relatively happy and apparently clear of the demons that plagued them in the original-timeline.
I'm not sure what this all means, or whether it's relevant. But the Jacob followers are happy; the Locke followers are miserable. There have been arguments over which side is truly "good" and which side is truly "bad" -- the flash-sideways may or may not serve a greater purpose than is currently visible, but if nothing else, they seem to be providing some enlightenment to the reality of one of the most important and mythologically-central debates on the show. And for that reason alone they are serving a crucial purpose.