Yes Homer is talented. I was as shocked as anyone who saw it! Not only has he got the perfect voice for a barbershop quartet, but also he is quite the songwriter. (This is seen later when he writes songs for Lisa in her singing competition)
The story of the B-sharps is anything but dull. This is probably my favourite flashback episode. The ones with Homer and Marge in their early days are alright, but I like it better when their relationship is more established and less of an issue like in this episode.
Homer's meeting with George Harrison was just priceless! Highlight of this great episode.