"The Vengeance Factor" includes some good story concepts and interesting things for characters to do but ultimately fails the viewer due to poor execution of these ideas.
A major pluse for this episode, like most episodes of TNG, is the acting on the part of the main cast. Patrick Stewart is notably good as Picard and it is always nice when Jonathan Frakes gets to show his depth of talent as Riker. The main idea of two factions of one race of people, divided by a century of warfare, attempting to reunite (with Picard facilitating negotiations) is also a good idea and one that sees some real pay offs.
However, the acting on the part of the supporting cast is pretty laughable (especially a particularly over-the-top Joey Aresco as "Brull," who kind of looks like a Hell's Angels high-on-Red-Bull version of Richard Gere) and some of the story points are played out poorly. Seeing such an embarrassing display really takes away from the supposed tension of the episode and sense of urgency from the story.
Especially poorly executed is the love story between Riker and Yuta (a lovely Lisa Wilcox). Riker and Wilcox do an admirable job but the story is stitched together pretty unconvincingly, containing some pretty lame and awkward moments.
To top it all off, the ending is played out in a hurry-up offense style: tying things off abruptly without any convincing build-up or any satisfying conclusions.
So while a number of good ideas exist in the episode, "The Vengeance Factor" simply suffers from some very bad execution - Stewart, Frakes and Wilcox carry this one past the watchable marker. I think there is a reason why Timothy Bond only directed two episodes of Star Trek: The Next Generation.