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Early in the episode, there is a dramatic scene of a dying man running from Psi Crops pursuers and passing crucial information on to a Ranger. The dying man says that B5 must be warned.
On B5, Sheridan and Garibaldi discuss Garibaldi's suggestion of bringing Talia into their secret anti-Earthgov-corruption group (which we saw most recently in "Hunter, Prey"). Sheridan agrees that Talia would be an asset.
Speaking of Talia, she and Ivanova have breakfast together, musing over their unlikely friendship. Talia fishes for a place to stay for the night, since some repairs have kicked her out of her quarters temporarily, and Ivanova takes the bait, offering her quarters.
A ship comes through the jumpgate, very beaten up and with an unconscious pilot. When the medical team brings out the unconscious person, Garibaldi recognizes her as Lyta Alexander, the first telepath assigned to B5 (as in "The Gathering"). Of course, Garibaldi is the only one left of the command staff that was also on B5 at the time of those events, so he describes the events in "The Gathering" to Sheridan.
When Lyta awakens in MedLab, she panics and grabs a syringe to use as a weapon, demanding to see Sheridan immediately and not to be left alone with anyone. She claims someone on B5 is a traitor.
When the command staff (and Franklin) meet Lyta, she tells them that certain people back on Earth are very interested in B5. After she was recalled after Kosh's attempted assassination, she was intensively interrogated about everything she found out about Kosh when she scanned him. She eventually fled from Psi Corps and ended up hiring herself out to revolutionaries on Mars to make ends meet. Her ultimate goal is to get into Vorlon space, but she's been unsuccessful so far.
While on Mars, one of the revolutionaries uncovered information indicating that a Psi Corps sleeper agent was on B5. The "sleeper agent" would be an artificial personality that was implanted into the mind of a normal person. The personality would be hidden from telepathic scan, but could be activated by the right circumstances (personal protection) or a control word that is telepathically sent into the person's mind. Lyta has the control word, and she is willing to search for the sleeper agent by sending the control word into the minds of anyone necessary. She just wants Sheridan's approval, but she warns that if the sleeper agent begins to perceive a threat, no one is safe.
Everyone else is pretty incredulous about Lyta's claim. Sheridan decides to take some time to consider the options. Ivanova, predictably, is dead set on having any telepath access her mind in any way. Further investigation by Garibaldi backs up the story Lyta described, and Garibaldi feels like Lyta is telling the truth. Sheridan decides to sleep on it.
Ivanova is in a rage over the situation, a fact that does not escape Talia when she arrives for the night. Ivanova can't tell Talia about the situation, but she does ask Talia if she knows Lyta (yes) and what Lyta was like (nice enough, but Talia knew her quite awhile ago). Ivanova despairs of being able to trust anyone, and Talia said that she felt the same for awhile (presumably after "A Race Through Dark Places"), but has come to realize the only person she can trust is Ivanova.
Garibaldi had ordered Zack to have Lyta moved during the night to a holding cell where she can sleep. When the two redshirts, I mean guards, move Lyta, someone shoots at her, taking out the guards - Lyta flees. We return to Ivanova's quarters and see that Talia has noticed Ivanova is missing.
The attack on Lyta has convinced Sheridan that she's telling the truth, but the problem is that she's still on the run. Lyta contacts Delenn and asks Delenn to set up a meeting between Lyta and the command staff so she'll be safe. Delenn does so with no questions asked.
Ivanova is angsting over a decision to reveal something, and she finally waits in Sheridan's quarters to tell him. The real reason she doesn't want any telepath near her mind: she's a latent telepath, an extremely weak one. She's scared to death that if the Psi Corps finds out, she'll be forced to join them. For as much as she hates the Psi Corps, this would clearly be a fate worse than death.
Sheridan is upset that Ivanova hadn't trusted him enough to tell him her secret before, but as Ivanova said, it's a question of survival, not trust. She's absolutely right, and it should be obvious to Sheridan. Once the knowledge is in Sheridan's mind, it could be detected by a telepath scanning him. Sure, telepathic scans are tightly regulated according to the law, but we have seen telepaths like Bester disregard those rules when it's convenient for them. If Bester found out Ivanova's secret, he'd certainly either compel her to join the Psi Corps or use it against her.
At any rate, Sheridan promises that they'll come up with some way in which Lyta won't have contact with Ivanova. Once they all meet with Lyta again, then quickly get down to business: Lyta sends the control word into each of their minds (except Ivanova), and none of them is the sleeper agent. Garibaldi pretends that he's possessed, trying to relieve some of their tension. Then Sheridan begins calling in B5 staff one at a time, while Lyta watches and sends the control word.
After hours and dozens of people, they haven't had any luck. Tensions are mounting, as Lyta becomes more and more certain that Ivanova must be the sleeper agent, since she's somehow arranged not to be tested. Ivanova explodes, but then she realizes how it looks, and I think that she finally decides that she doesn't want to continue being uncertain if she is the agent. She tells Lyta to send the control word... but she's not the sleeper.
Talia happens to walk into Sheridan's office, and Lyta sends her the control word. Immediately, Talia breaks into a rage, and grabs Garibaldi's gun to try to shoot them. Garibaldi gets the gun, but can hardly control her. She is livid, threatening them all for blowing her cover and proclaiming loyalty to the Psi Corps. Garibaldi locks her up in her quarters.
Later, Sheridan and Garibaldi discuss their fate. They got lucky that they hadn't yet ask Talia to join their conspiracy, but she does still know a lot about what they've done. Most of the events (such as those in "A Race Through Dark Places") would be embarrassing to the Psi Corps if they should become public, so they are probably OK.
Ivanova visits Talia to say goodbye, but there's nothing of the Talia she knows left - she even looks different somehow, which is a credit to the actress and makeup people. The new Talia sneers about taking advantage of Ivanova and the others on B5, saying just what they wanted to hear. Ivanova is completely shaken and beats a hasty retreat. Talia is being returned to Psi Corps. (I do wish I could have heard Sheridan making that request to Psi Corps: "Oops, we discovered one of your sleeper agents... can we return her?")
At the end of the episode, Lyta visits Kosh, telling him that she never told anyone what she saw when she scanned him. She asks to see Kosh again, one more time, and Kosh opens his encounter suit... and we cut away before we can see what Lyta sees.
This episode gives a good whack to the overall plot of the series. The introduction of sleeper agents like Talia's is insidious - anyone could be a sleeper agent and not even realize it. However, one must think that creating the artificial personality of the sleeper agent, implanting it into a "host", and then doing the proper conditioning to hide it must be expensive and time intensive. Even so, any person that is out of contact for an extended period and potentially in the hands of Psi Corps could be turned into a sleeper agent. To the credit of the series, the idea of sleeper agents was well-supported by previous episodes such as season 1's "The Quality of Mercy", where an artificial personality was going to replace the murderer's, and "A Spider in the Web", where Abel Horne's personality was replaced. Talia's sleeper agent was foreshadowed last season in "The Quality of Mercy" when she commented to Garibaldi about the terrible things that live inside everyone.
The activation of a sleeper agent is akin to murder, since the original personality in the body is completely destroyed. As far as we know, "our" Talia is dead irrevocably. The original Talia had enhanced telepathic abilities, a gift from Jason Ironheart in "Mind War" in season 1. Are those enhanced abilities lost, or where they more physically based, so that the "new" Talia could still access them? Either way, the "new" Talia would know of their existence - when she tells the Psi Corps about them, what will they do? The "new" Talia may end up on the experimentation table to see how her enhanced abilities work. One of the telepaths in the underground railroad called the original Talia "the future" of telepaths at the end of "A Race Through Dark Places". I guess the future isn't looking too good right now for them.
It's also a shame to lose the character of Talia in the series at this point when her relationship with Ivanova seemed to be blossoming. As they discussed, their friendship was extremely unlikely, but once it got started, they both realized that their unique attitudes and experiences meant that they could trust each other. Of course, now the viewer along with Ivanova must wonder how many of Talia's actions were initiated by the sleeper agent in an effort to get close to Ivanova. This whole situation has to be completely devastating to Ivanova - not only has she lost a good friend, but now she has to wonder how much of that friendship was real. With all of Ivanova's family dead, the revelation of her secret, and the loss of Talia, Ivanova's mental state has been taking quite a beating. The continual stress Ivanova must be under to not reveal that she's telepathic must be amazing. I'm kind of surprised that she didn't find some kind of career that was about as far away from telepaths as possible - maybe some kind of exploration.
The episode did a good job of making Ivanova a red herring for the sleeper agent. We knew she wouldn't want to cooperate with Lyta, but her protestations were in the extreme. Then she goes missing at the time of the attack on Lyta (to get some air), and later bemoans having to reveal a secret. This last item was a hint that Ivanova was not the sleeper agent, since the agent certainly wouldn't have let on that Ivanova had a secret. Once we hear Ivanova's secret, we realize she's probably not the agent, because it really is a pretty incredible secret.
I haven't decided if the sleeper agent made an error or not when it decided to attack Lyta in the middle of the night. On one hand, as Sheridan said, it confirmed Lyta's story. On the other hand, the agent probably saw the opportunity to eliminate Lyta when Ivanova disappeared from her quarters. When Talia mentions to Ivanova that she woke up and she wasn't there, that could have been a damning statement to Lyta or one of the others. I think the sleeper agent took the risk of the attack, but it didn't work out.
What's going on with Lyta's obsession with Kosh? Obviously her telepathic scan of Kosh was a revelation to her, such that she is determined to get into Vorlon space. What does she think will happen then? Why doesn't she just ask Kosh to take her there, or to get the other Vorlons to allow her to go? Why did Kosh agree to go to the effort of showing her his true appearance? Obviously she already knew it, but it seems like a bother for him to comply with her request. Perhaps he feels that he owes her for her efforts in "The Gathering"?
It's nice to see Lyta come back, and that there were ramifications to her scanning of Kosh and recall to the Psi Corps. She obviously no longer worries to much about the rules governing telepaths (since she would send the control word to anyone), but interestingly, she awaited Sheridan's permission to begin the search. She may have deduced that Ivanova is a latent telepath since Ivanova initially blocked her scan - will she do anything with that information?
A few minor scenes in the episode showed that Sheridan and Delenn were continuing to develop their relationship. Interestingly, in both "Confessions and Lamentations and in this episode, it seems to be Delenn that is being aggressive (although that's really too strong of a word) - she's the one that is reaching out and touching Sheridan. Honestly, Sheridan still seems to be in a bit of a daze about the possibility of a relationship with her. Is Delenn truly acting only on her feelings, or is she trying to tie Sheridan to her and her cause even more?