Season 3's "The Offspring" seems to hold a strong place in the hearts of many Star Trek: TNG fans. Although I found it to be good overall with many elements to enjoy, "The Offspring" did not leave as strong an impression on me as it seems to have done for others.
The story goes as follows: Data creates an android in his image with his programing, named Lal; basically his offspring. Starfleet salivates at the android's possibilities and wants to take her (as it ends up choosing to be a "her") away from Data and the Enterprise. Captain Picard has to deal with Starfleet's lack of respect for this new life and tries to find a way to keep Lal with Data. Meanwhile, the basic task of raising Lal proves difficult for Data - as it does for all parents.
Where "The Offspring" goes right is the way that it depicts the trials of parenting. Lal's development is faster than most human children (mostly because she receives regimented updates of Data's programming, but also because it's only a 45-minute episode) but all the steps are there: motor skill development, social skill development, asking life's little questions, asking life's big questions, gaining an identity and becoming self-sufficient. If "The Offspring" affected me in any way it was reminding me of my own children and how much raising them has been a blessing in my life. Of course, Brent Spiner gives an especially great performance of Data in the episode as well. What really makes this performance stand out is the way that Spiner has to portray an emotionless Data going through things that make an ordinary person very emotional.
The other way that "The Offspring" works as a good Star Trek: TNG episode is Captain Picard's role in all of this. Picard is put in the difficult, unique situation in having a new android on board with extraordinary abilities put into his care as ship's captain and defending his friend's right to care for that child against the greedy hands of the Federation. Patrick Stewart rises to the occasion and really impresses on screen.
Unfortunately, I also think that "The Offspring" does not work well as a great episode of Star Trek: TNG. The main reason is how Lal is portrayed. Hallie Todd had the difficult task of portraying Lal but cannot quite make the grade. It takes a great, unique talent to not come off completely awkward as an android - Spiner is great as Data, making the audience like him immediately in just about every scenario. However, Lal comes off as awkward - and not endearingly so. Lal is a very creepy being - I found little to like about watching her; and if you cannot make the most emotional part of the episode work, which I think "The Offspring" does not, it's hard for the episode to be great.
The other problem with "The Offspring" is the casting of Nicolas Coster as Admiral Haftel. Coster is horrible in the role - overacting completely in every scene. His moments in the final scenes are especially awful. Not only is his scene, describing Data's final acts of love towards Lal, poorly constructed on-screen, Coster garners laughs instead of tears as he describes the depressing scene.
Overall, "The Offspring" is a good episode because of Spiner, Stewart and some good execution of some of the story points and themes - however, there are too many crucial flaws for me to consider this one of the best episodes of Star Trek: The Next Generation.