This episode is very well written. The dialouge was great ("Sounds like crap when you say it..."), and the acting was great too. In my opinion, this was one of David Duchovny's best performances in season six (Arcadia takes the cake, though).
This episode was very confusing at first. I was thinking, "So, they're dreaming about realizing they're dreaming, then they dream that they wake up from their dream, but then they really wake up after dreaming about realizing they're dreaming again?" I understood it all by the end, though. I thought the last scene was sweet.
This is a very good episode. Confusing (or is it just me?), but very good.