Strong start, weak finish.
Lair creates and sustains an atmosphere of mystery and danger for the first two acts, despite some clunky dialog and the standard, superfluous battle droid bit, but the final act feels rushed and incomplete. Kit Fisto's (Fisto? Really, George? Really?) actions after the death of his former student - a great death scene, by the way - are rushed, confusing, and dramatically inert.
And the moral of the story, "don't answer power with power," is murky at best. It makes the Jedi once again look like close-minded, emotionless hypocrites, since Obi-Wan directly confronts Grievous in Revenge of the Sith in much the same way that Vebb does in this episode. I know Lucas has implied again and again that the Jedi of this era have closed themselves off from their emotions to the point of their detriment, but it has yet to be conveyed properly in any story in any format. Lair is no exception.
These things aren't not enough to ruin the episode, but it makes it feel like, well, a competent but not exceptional TV show. And the last thing The Clone Wars should feel like is just another TV show. Lair is good enough, though, that I'd recommend it to casual fans of the Wars.
The one big improvement in this story is General Grievous. I liked his character considerably more in this episode, since Lair implies that he choose to become a cyborg, instead of needing to become one to sustain his ruined body. I like the idea that he suffers almost from surgical addiction, and that he traded his humanity (or Kaleeshity or whatever) for his "improvements."
I've always thought his character was unnecessary, and he's the worst example of technology in the prequel stories that was considerably more advanced than that found Episodes IV-VI, thanks to twenty years of advances in special effects. More importantly, Grievous took away valuable screen time from Count Dooku in Revenge of the Sith. Dooku's character and his motivations were never properly developed, and Christopher Lee - Christoper Fuckin' Lee, man - was wasted in that film. Without Grievous, Dooku could have been killed later in the movie, ending the Clone Wars, giving the character sufficient time to develop and end properly.
But Grievous works in the cartoons, and I finally believe that he could become an interesting, formidable villain, if there are more episodes like this.