At the beginning of this episode Ted is divying up the masses with the other priest at Castlelawn. This is a reference to Good Luck, Father Ted the very first episode when he was trying to divy up the masses with Father Jack. However Jack was less agreeable then the priests at Castlelawn.
Graham Linehan and Arthur Matthews decided Series 3 was to be the final season of Father Ted. Because they felt there was nothing more they could with the sitcom and with the characters and Dermot Morgan announced he was leaving Father Ted and Series 3 was to be his last, because he wanted to move on and do other roles.