Being the prelude to the season finale, this is another homerun for the freshman series. This is exactly the kind of episode that I wanted to see in the wake of the renewal announcement: an episode that felt like a highlight reel of all the reasons why the series deserves to continue.
It's been a while since Harris was around to plague Olivia's career, but it was worth the wait. It's ironic that I suspected Broyles earlier in the season and never quite took Harris at anything other than face value. If I had ever suspected him of working for Bell/ZFT, then it was merely a fleeting thought. If Harris was working for Bell/ZFT, then why would he have obstructed Olivia so often, even in cases where she was supposed to be involved to "prepare" her for further training?
I was also waiting for the pyrokinesis situation to shed light on that videotape that Walter was watching not so long ago, with young "Olive" sitting in the corner of a burned out room. Was the situation in this episode an evolution of those earlier Cortexiphan experiments? It would logically be so. The presence of the light board in the warehouse lab chamber also helps paint the picture that this is the continuance of those early efforts to prepare soldiers for a war against invaders from a parallel universe.
Walter's discussion on the Many Worlds Theory was about as brief as one would expect, but this is one of those aspects of the show that mines actual science. The Many Worlds Theory has been gaining more and more traction in the realm of quantum and post-quantum physics, and I've even heard that explanation for deja vu tossed around more than once.
What Olivia's experience seems to indicate is that she is somehow developing the ability to jump between parallel realities. After all, it's more than just seeing what is happening in those alternate worlds, but rather, interaction within those worlds. If this is the same parallel universe that is supposedly incurring into the world we know and love on the show ("Fringe Prime", for sake of simplicity), then it debunks the theory that the Observers are the invaders.
But there's no reason to believe, based on the Many Worlds Theory, that there's only one parallel world in play. The possibilities are effectively infinite. The Observers could come from one version of reality, one much more divergent from Fringe Prime than the one Olivia saw in this episode.
A lot seems to hinge on what William Bell has to say for himself. Walter claims that Bell was the author of the ZFT Manifesto, but there's no definitely evidence yet that Walter wasn't really the one who wrote it. That said, it's about damn time that Olivia confronted Walter about everything that was done when she was a child. If his memory hadn't imploded (or been altered), would he be so semi-repentant?
Based on the way Walter acted when the Observer came calling, I'm certain that the Observers were involved in whatever incident drove Walter off his rocker. I'm also certain that Nina Sharp knows a lot more than she's letting on, and that the conspiracy nut was right on the money, up until he started promoting the new Star Trek film. If there was a moment in the episode that didn't quite work, that was it.