The setback about this episode is that it tends to be one that everybody forgets about. Some people who do remember dislike it, which is really too bad since it is not a bad episode at all!
The basic outline of the story is as follows: Kramer gives Jerry a pez dispenser which causes Elaine to laugh during George's girlfriend's recital; Kramer joins the "polar bears" swim team and has an idea to make a colone (sp?) that smells like the beach; Jerry holds an intervention for somebody he hasn't seen for over 2 years; and the PEZ DESPESNDER fits into all of that.
As all Seinfeld episodes, I highly recommend viewing this one if you already have not. This is one of the episodes that can still frequently be seen on the FOX network.