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At the end of the first part of this two-parter, in the altered timeline, the stargate from Antarctica had just been installed in the Cheyenne Mountain complex and General Hammond was contemplating the first mission through the stargate. He rejects the idea of Daniel and Carter being on the mission since they have no military training - what, some common sense?
Colonel O'Neill returns to active duty to lead the mission, and in a nice touch, Major Kawalski (from the first season) is there to be his second. Daniel and Carter show O'Neill the Ancient time-traveling spaceship and instruct him in how to use it; they manage to get on his good side and he asks for them to go along on the mission.
What is the mission? To try to recruit Teal'c. Why? I guess they are still following the instructions on the video tape, even though the benefits to them are not clear. When they get to Chulak (I guess), they are captured by Apophis's Jaffa. Teal'c is first prime and is initially not very sympathetic to their bizarre time travel story. However, while Apophis tortures Daniel and implants a symbiote in him, Teal'c watches the "real" him on the video tape and is clearly moved by the idea that in the "real" timeline the Jaffa are free. He arranges for the humans to escape, and then joins them, incidentally killing Daniel because he knows he is now a Goa'uld.
Apophis's Jaffa chase them back to the spaceship, killing off everyone except O'Neill, Teal'c, and Carter (at least Kawalski lived a few years longer in this timeline). They are also attacked in flight, and cannot return to the SGC through the stargate. Teal'c also reveals that Apophis's has turned his attention toward Earth and an invasion fleet is on the way. They decide to go back to 3000 BC and "fix" the timeline. At least now they have motivation: if they restore the timeline, Earth will not be invaded by Apophis.
When they arrive on Earth in 3000 BC (shortly after the original team did), they discover that only Daniel (the "real" Daniel) is still alive. The others were captured by Ra and executed for fomenting rebellion. Daniel and his native friends are working more slowly toward another rebellion. Because of the altered SG-1's knowledge of history, they know that the rebellion is successful, but Ra takes the stargate with him, so the timeline isn't fully restored. They need to make sure the rebellion still is successful, but also keep the stargate.
O'Neill and Carter try to get the spaceship's cloaking device working (they didn't know about it until "real" Daniel told them), but Ra's Jaffa discover them. Daniel and Teal'c capture these Jaffa with the help of the native rebels. O'Neill and Carter realize they are attracted to each other and go at it.
Apparently whatever happens after that point is what "should" happen, because we jump to the present day, "real" timeline, just before the last scene of "Threads". O'Neill and SG-1 are watching the video tape, but now everything the tape says should have happened did happen, so there is no problem. As a bonus, the team(s) in the past moved the ZPM to where it would be discovered with the video tape, so the SGC now has the ZPM, and thus they have no reason to go back in time. Thus, the initial events in the first part of the episode, "Moebius, Part 1", where they planned the time travel trip, never occurred. The final scene of "Threads", with everyone fishing at O'Neill's house, is reprised, except there are now fish in the pond. O'Neill says, "Close enough." End episode.
Argh. This two-parter makes me mad. It's all about the writers trying to have their cake and eat it, too. Want an O'Neill/Carter romance? No problem! Don't like the idea? No problem there, either - it's not the "real" them. The SGC needs a fully-charged ZPM. No problem! Let's do a funky timeloop that has no consequences, except to give them a ZPM.
Well, let me try to do some kind of serious analysis. What happened to the Ancient time-traveling spaceship? As far as we know, the second trip back in time (with the altered O'Neill, Carter, and Teal'c) never left that time. Apparently the characters lived out their lives there. So, the ship was left in the past. Has anyone in the present day found it? We have no idea. If so, I hope it is destroyed like the altered Carter suggested, because it's way too much trouble.
Actually, what would have happened with those people that remained in the past? At the end of the episode, the "real" O'Neill and SG-1 concluded there was no reason to time travel into the past. But the "real" Daniel was one of the people left in the past - what happened to him? Did he just vanish from the past? If that's so, then the acts he did, such as helping the rebellion against Ra, would not have occurred, so the "real" timeline would not have been restored. This is obviously a paradox, and one of the reason that time travel shows really shouldn't try to be so clever.
Some of the paradox is resolved by the fact that we know they aren't actually completely in the "real" timeline because O'Neill's pond now has fish. So there have been some small changes. O'Neill is way too blithe about waving off the difference and saying it's "close enough". Sure, maybe everything on the video tape has actually happened, but what other changes have happened that have had a profound effect on other people's lives? Blah - time travel is just a mess to think about.
The altered SG-1 members were also not really all that much fun to watch. The nerdy and meek Daniel and Carter were amusing for a few minutes, then became pretty painful. The altered Carter apparently needs to check her eyeglass prescription with all the squinting she was doing. The altered Teal'c didn't seem too different, but we didn't see him that much. The altered O'Neill also didn't seem that different until he decided to make an awfully-executed pass at Carter. I am not opposed to an O'Neill/Carter relationship, but this just seemed so painfully obvious on the writers' part. Also, since none of the characters knew each other well, there was none of the sharp dialog that is usually such a pleasure in the show.
I am not necessarily opposed to time travel stories, but I think they need to be more carefully thought out and executed. Season 4's "Window of Opportunity" is one of my favorite episodes, and I also liked season 4's "2010". "Window of Opportunity" had a repeating timeloop, but when it was broken, the situation was not "reset" - there were real consequences in the form of O'Neill's and Teal'c's memories and the time lost to all of Earth. "2010" did not have a repeating loop, but was focused on making on small, key change in the past that would have profound effects. This episode was just a mess of overlapping time loops that somehow added up to a "reset" ending, except for the ZPM.
I wish that "Threads" had been the last episode of the season.