The producers mentioned, some time ago, that the second half of this season would be somewhat more streamlined and familiar. If this episode is any indication, they were absolutely correct. This is practically old-school "Lost", in terms of structure and character exploration. It's also a great way to introduce a rather unexpected twist.
This is all about Sayid, though there are moments that shed light on Sawyer's ongoing inner conflict. After all, this is almost a direct follow-up to Sawyer's scathing criticism of Jack in the previous episode. Sawyer slammed Jack for being too reactive as the leader of the Oceanic Tribe, and now he's being forced into a similar reactive mode. Whether or not Sawyer is up to the task remains to be seen, especially in the wake of Sayid's escape.
There's also a bit time of time spent on the Love Polygon, with Sawyer and Kate making rueful eyes at one another and alluding to their repressed true love, while Juliet rightfully starts feeling like her happy little Dharma life is about to implode. It's hard not to sympathize with Juliet, because she's gotten the short end of the stick for far too long. Meanwhile, Jack is brooding, which surprises no one.
Going back to the very beginning of the series, the island has represented a choice: change or perish. How many times has someone paid the ultimate penalty for resisting positive change in their lives and refusing to grow? That doesn't bode well for Sayid, who has decided that his return to the island means that he must embrace what he has been: a killer. It wouldn't be surprising if Sayid had an unfortunate encounter with a certain security system in the near future as a result.
Sayid's psychological process was on display in this episode, and it was nothing short of tragic. The writers turn to an all too familiar source for Sayid's wicked ways: the ubiquitous "I was raised that way" defense. This implies that people cannot change. Others, however, have changed over the course of the series (Sawyer, for example), so it's not a question of Sayid's nature or how he's been nurtured.
The tragedy is that Sayid might have turned from this path had he been permitted to live in happiness with Nadia. He might have changed if he had been allowed to remain in the middle of nowhere, atoning for his sins by helping others. Ben was the one who prevented that from happening, and it's quite possible that this episode provides insight into why.
Previously, it appeared as though Ben used Sayid in his war against Charles Widmore because Sayid was simply the best man for the job. Sayid had the training and (after Nadia's death) the will. But was it as simple as that? Not if Ben remembers a man named Sayid shooting him in the chest. Not if Ben has undergone an experience much like John Locke, and knows, on some level, what must be. (And for that matter, one might wager that Richard knew about this as well, and that's why he told Ben to be patient in "Man Behind the Curtain".)