I found tonight's Lost episode, "Two for the Road" pretty boring and nonsensical... until the last three minutes! Spoilers below the fold.
Via some links from Bernardo, here's a great message board with a lot of information: Dharma Secrets.
First, I'm thrilled that Ana-Lucia is dead. Woohoo! Second, I was completely shocked when Michael killed her to free White Henry Gale. I can only assume that the Others agreed to release Walt if Michael would free White Henry Gale and infiltrate the castaways. Obviously all the information Michael gave Jack, Kate, and Locke about the Others was false, and Kate should be able to put the pieces together because she saw the fake beard and knows that the Others aren't really dirty and weak like Michael described.
I'm pretty sure that White Henry Gale is the leader of the Others. When WHG was talking about "Him" he first said how brilliant the Others' leader is and only then mentioned that He is unforgiving and will probably have WHG killed. Plus, it's obvious that WHG is psychic and is using his powers to subtly manipulate his captors, particularly Locke and Ana-Lucia.
My prediction for the end of the season is that the castaways follow Michael and confront the Others, who will turn out to be waiting for them. The situation goes against the castaways until Walt shows up and decides he's still on their side, despite having been mostly assimilated into the Others. Walt's psychic powers turn the tide of the battle and give the castaways the upper hand.