The first episode is called "Billy Ocean" and it's great, trust me. While at the beach, Billy is thrown into the water by Grim (after he buried him into the sand, "only to his knees"). While in the water, Billy is eaten by a giant whale, although Grim kind of hoped it would be a barracuda attack.
Inside the whale, Billy is reunited with Pinocchio, who still wants to devour his flesh in order to become a real little boy (see episode "Nursery Crimes" for more details). He is stopped however by his father, Geppeto, who immediately takes a liking to Billy and wants to adopt him as his son.
Meanwhile, Mandy and Grim, aided by an all-wood captain, search for the whale (Blubbery Joe). Grim however seems to be a little sea sick. Back in the whale, Pinocchio, jealous of how much time his dad spends with Billy, is visited by the Blue Fairy, who tells him to start a fire inside the whales belly. Pinocchio does so, but only to cook Billy so he can eat him.
Be sure not to miss the scene where Grim parts the sea using his scythe. The whale sneezes Billy, Pinocchio and Geppeto out and they all live happily ever after... sort of.
The second segment, "Hill Billy" is great as well. Worried that Billy spends to much time watching TV and doing absolutely nothing, Mandy and Grim tell him to "chase his dream". Even if it's a stupid dream, Billy insists on becoming a legendary chicken juggler, just like his idol, Uncle Chokey. He leaves towards Uncle Chokey's farm, where he is welcomed by a country dirt gnome. Uncle Chokey starts a phonograph and everything that is "touched" by its music becomes a black and white retro cartoon. Meanwhile, all over the city, all eggs have disappeared. Mandy and Grim start to investigate and they arrive at Uncle Chokey's farm. They are also transformed into retro cartoons by the music which Grim says it sounds like a moose giving birth to an elephant, until Mandy uses a chicken to destroy the phonograph. In the end, Billy returns to his "normal life", watching TV.