I was as impressed by this episode in much the same way I'd be impressed with a feature film on the subject. In fact, if you exclude the performances of the actors and the production design, I'd say it would stand up to any sci-fi classic. Not that the acting or design is poor in the least, only that for me, they were totally eclipsed by the writing.
When I first saw that the episode had 6 writing credits (5 for teleplay and one for story) - unusual for a Star Trek episode - I was a little taken aback. Having that many people attempting to craft a relatively straightforward story can sometimes turn into a mess. But by the end, I couldn't imagine it being made any other way. It's obvious a lot of care went into the crafting of this script. It's a well-contained story that's fleshed out beautifully; the kind of sci-fi tale that evokes wonder without a hint of incredulity. You believe the actions and the responses of the various agents all the way through, and yet you're still amazed that it all comes together in the end.
In summary, it's the story of a first-contact situation, in which Picard and Riker both play out separate facets of delicate Federation protocol. This protocol has always been one of the marvels of the Trek universe for me, and it's gratifying to see it fleshed out so well. The Federation, with Picard (and Riker) at the helm, attempts to establish relations with a culture on the cusp of interstellar travel but whose people and values may not be ready to meet an intragalactic community. This is the essential conflict of the tale, and we see it from both on the ground (Riker operating as an alien observation agent at risk of exposure) and "in the air" (Picard carrying out the careful diplomacy). This is a situation brimming with potential, and the writing manages to hold its water without springing any leaks. It's mysterious, thrilling, potent, and believable. Every character is backed up with his or her own sense of right which somehow escapes contrivance: The conservative security official, the cautious but optimistic leader, and the utterly progressive scientist provide the right, left, and middle of the world's political entity, each with their own goals and motivations. The true genius of the script is that each character is satisfied without contradictions, something that is no easy task in writing, providing a conclusion that is totally satisfying.
The dialogue, especially when delivered by the veteran Patrick Stewart, is subtle enough to let the tensions speak for themselves. The characters almost never raise their voices - the writing is good enough that they can speak plainly and still exude personality and emotion.
On top of this, the story manages, unlike most TNG stories, to show that the idealist Federation is not the be-all-and-end-all winner. I must avoid spoiling too much, but suffice to say that the unexpected arrives without ruining the ending, and we are left completely satisfied by its compromises.
All in all, a true gem of a story, whose writing exemplifies thoughtfulness and wisdom.