There are not a lot of episodes that contain this degree of seriousness, but those that do, including this one, are truly magnificent. Halfway through the season, the plot now picks up again, and though it doesn't fly off at full speed, there are several big points that can be ticked off the progression list.
The first thing that's special about this episode is the recap in the beginning. Though this has now become a standard feature for Book Two, the recap for this episode is especially long, and pieces together a great number of (yet) unrelated events. While this might indicate a very filled episode, not all of them are touched upon, which can only mean that we can expect a great deal of plot development in future episodes.
The episode itself is actually pretty straightforward. We start out with the gang taking mini vacations, something that makes them that much more human. Constantly fighting and training must take its toll, and taking time off allows the show to portray the characters not as super beings that can keep going forever, but as normal people.
While the story quickly turns back to defeating the Fire Nation (even though now with a much more imminent feel), and the concept of a vast library built by the Spirit of Knowledge not necessarily a world-shattering new thing, the situation is handled quite well. The, not really new, idea of offering books before being able to visit a library is a nice touch, but much more impressive is the hurdle that Wan Shi Tong himself poses. This scene foreshadows the entire episode, because it is just clear that the group's lie cannot hold forever, and that things are bound to go terribly wrong. Wan Shi Tong gives off a strong aura of power and danger, and the gang is walking on the edge of a knife with their fake promise.
Because Toph can see with earthbending, it's very easy to forget that she's actually blind. The show keeps reminding us of that fact, however, both in a joking and in a plot defining manner. Toph's disability prevents her from helping Appa effectively, and his kidnapping is yet another powerful narrative device and plot twist incorporated in the series.
Meanwhile, in the Library, we get to learn a bit about the history of the Fire Nation, as well as get a solid invasion plan. After the primary goal for this season (find an earthbending teacher for Aang) had been completed, it's good to have another objective to act as a general guide through the rest of the series.
The ending is something akin to a cliffhanger. Although the gang makes it safely out of the sinking Library with the knowledge of a solar eclipse, Appa is now missing. Aang's concern is clear the moment he emerges from the window, and I really like Toph's wordless reaction to his question. It was better than any line she could have said at that moment.
This episode is sort of like the starting piece of a domino lineup. It starts up slow, but ends with many unanswered and unresolved plot points that will then have to be addressed in future episodes. It brews up the overarching story and makes it ready to be served to the audience. It is from this chapter on that the plot really takes off, and it will hopefully dunk the rest of this season into pure awesomeness.