Ohh, a lotta things going on. The two timelines are finally coming together a lot more.
Widmore makes "the package" Desmond stand between two copper spools that grill careless nerds.
What it does to Desmond is not entirely certain. It looked to the viewer as if he lived through his LA reality.
Waking up from that he suddenly is all for Widmore's plan, whatever that entails exactly.
I can't decide if he looks indifferent or excited as he is going along with Team Widmore. He even keeps that attitude as Sayid attacks them and kindly asks him to come along.

In LA, single loner Desmond works for Widmore as his right hand, but doesn't know Penny, and has to take care of the difficult rock star Charlie who drives them into the bay. And as Charlie is stuck behind the glass, we see his hand with "Not Penny's boat".
Des meets Widmore's wife Eloise, who tells him to stop looking (for Penny?) and that he is not ready yet (for what?)
Daniel, Penny's halfbrother is a musician here, not a physicist, but he scribbled a page of phyiscal formulars one night.
He encourages Des to meet up with Penny. They connect so well Desmond faints.

This episode was so full of references and hints to things we already know. Penny running in the stadium like Des did, bleeding freighter victim Minkowski being the driver, Charlie talking about loving the blonde girl from the plane (which I think is the reason Desmond helped Claire at the baggage reclaim, this way they can connect again)...oh and Daniel still loving Charlotte, who is screwing Sawyer instead, haha. Who did Miles say Charlotte was. A friend of his...?

Desmond is the first to really notice that something is wrong, and now he wants the O815 passenger list. It was about bloody time. 5 episodes remain!