To be honest, I was dreading this episode. Apu's character has been shaken about so much over the last few years, what with him getting married and having eight kids, I really thought this was going to be another "we're running out of storylines" type episodes from the writers.
However, this episode was excellent. Apu was still as funny as he has always been, and with Homer involved it gave it that edge (like the episode Homer and Apu).
Great moments included the civil war re-enactment, with Barney finally drinking beer; Homer walking backwards from the Kwik-E-Mart to his house, and then dreaming about walking backwards; Homer & Marge's attempts to get Apu & Manjula back together; and finally, Homer's walking backwards on the ladder at the end.
The only thing I didn't like was Homer saying "penis." It's not that it wasn't funny, it just doesn't belong in The Simpsons, the same as the "mummy boner" from DABF05 or Homer talking about someone's wiener in CABF18. That's what I watch South Park for.