The freighter blows up, sinks

Here's the freighter, Kahana, blowing up and then sinking. Jin can't be seen on the ship when the bomb explodes, so there's a good chance he made it off in time. Sun, in the helicopter, assumes Jin is dead and sobs uncontrollably as they hover over the water.

The engines work, the fathometer is down

Michael tells Desmond that the engines should be working and Desmond runs to tell Hendricks, the helmsman. The engines fire up and they dial in the bearing, 305, but but there is something causing interference on the fathometer and they can't see the reef. He says it's coming from the boat and Desmond runs off to find it and shut it off. Hendricks also says that he won't get any closer to the island that 5 miles without the fathometer.

It's not important but as Desmond's running out, there's a "how to wear a life preserver" poster next to the door. I just thought it was funny.

Sun and Jin shocked to see Michael

Here we see Sun and Jin's reaction to seeing Michael aboard the freighter. I think to say they were shocked would be an understatement. Michael tells then them that he and Walt followed the bearing Ben gave them and found an island with people. He says they sold the boat and hopped a cargo ferry back to the United States. After Sun asks him if he's now working for Ben, he tells them that he's trying to make up for what he did (killing Ana Lucia and Libby).

This explanation of how he and Walt got back to the states is a lacking details. Is he telling the whole truth and will we ever see how these events played out?

Keamy kills Dr. Ray and Captain Gault

When Frank says he's not going to fly Keamy and his team back to the island, Keamy, in another act of brutal violence, slits Dr. Ray's neck and throws him overboard. Captain Gault shows up firing a gun in the air and tells Keamy to stand down. Keamy points out the device on his arm, Gault turns to ask "What's that on his arm?." Keamy then shoots Captain Gault. Frank then agrees to fly the helicopter back to the island.

In the end, Captain Gault died a hero. He didn't seem to accomplish much, but he did help Sayid leave the freighter.

Keamy's team loads up on firepower

Keamy's team loads up up the helicopter with a lot of weapons so they can attack the island. This is some serious firepower. How much damage do they plan to do?

Sayid heads back to the island in the Zodiac raft

With Captain Gault's help, Sayid heads back to the island in the Zodiac raft hoping to ferry people back to the freighter. Desmond stays behind, saying that he's been on the island for three years and never plans to set foot on it again. Gault tells him to make sure he stays a compass bearing of 305, just like the helicopter.

Keamy's secondary protocol has Dharma logo

Keamy takes a key from around Captain Gault's neck to access a safe in his office. It contains a secondary protocol which tells them where Ben is heading. Charles Widmore apparently knows where Ben would go, so now Keamy does too.

The most interesting thing about the secondary protocol is that there is a Dharma logo on the front. It's the same logo that was on Ben's Dharka in "The Shape of Things To Come." This is quite possibly the Orchid logo.

Widmore seems to know a lot about the island, but what is his connection with the Dharma Initiative?

Michael is finally back, still can't die

So we finally see Michael again for the first time since "Meet Kevin Johnson." He's handcuffed to a pipe on the freighter. Keamy questions Michael asking if he knows who he is and did you tell Ben about me. He answers honestly and Keamy then attempts to shoot Michael in the head. Surprise! Once again, the gun doesn't work and Michael's life is spared again. Apparently Michael's work is not done.

Freighter crew injured by smoke monster, Dr. Ray alive

Here we see the damage that the smoke monster did to one of the freighter mercenary guys. He later dies from his injuries.

Also, here we see Doctor Ray, alive and well on the freighter, at least at this point in the episode.

Inside Michael's case + Libby again

The first shot is of the pipes where Michael puts the "explosives" in the engine room. It says "FUEL LINE ONE - WARNING - NO OPEN FLAMES."

The rest of shots are of contents of Michael's case. The tools on top were removed to reveal "explosives" that say:

DEMOLITION BLOCK M3A1
COMPOSITION 4
EXTREMELY HAZARDOUS: AUTHORIZED MILITARY PERSONNEL
EXPLOSIVE!
USE EXTREME CAUTION DURING HANDLING

Michael enters a code (71776) on the number pad to activate the "EXECUTE" button. Before Michael pushes the button, he hears the same Mama Cass song that was on the radio when he tried to commit suicide in the car. Libby then appears and says "Don't do it Michael." After he pushes the button, a stick pops up with a note that says "NOT YET."

While it seems cruel to torture Michael like this, it seems that Ben may be sincere about not killing the innocent people on the freighter. At the same time, at the end of season three, he tells the extraction team to kill anyone who gets in the way of them taking the pregnant women. As always the question is, can we trust Ben?

Kevin Johnson's shipment/box

When Michael arrives to check in at the freighter, Naomi tells him (Kevin Johnson) that he has a delivery that will be brought to his room. It's a box with a padlock from Ben. There will be another post with the contents of the box.

The freighter is heavily armed

The freighter crew is heavily armed (at least some of them are). Are they coming to kill everyone on the island? Are they coming to wage war on Ben and the natives? Are they who shot Karl and Rousseau? Time will tell.