The Enterprise crew investigates an energy cloud on their way to a peace conference. They must transport representatives from the Antica and Selay races, who are prospective candidates for the Federation. The two races abhor each other and Picard and his officers learn the tireless difficulties of mediating peace negotiations between two sides that agree on very little (a recurring theme). The tasty ending might indicate that the races are not ready to be part of the Federation.
The ship starts having technical difficulties after encountering an energy cloud and unknowingly taking on an energy being from the cloud. The energy being passes around the crew and ship computer, desperately trying to study navigation and find a way to get back to its cloud. It can somehow coexist inside people and computers.
Here are a few notable things that short plot summaries would tend to miss:
(1) I love it when Star Trek characters are given thoughtful lines. Picard comments on a long history of hostility between civilizations: they often feel hatred over different 'customs, God concepts, and even (strangely enough) economic systems'. It is difficult for people in the Star Trek world to see how people would fight over economic systems and money -- they don't work for money at all now and only work to better themselves.
(2) The energy cloud travels at warp speed, but this doesn't seem to bother anyone or make them overly suspicious of it. This would have been a good spot for witty comments about human arrogance, anthropomorphizing, and disregard for different kinds of lifeforms, which would explain how the characters never seem to consider the energy cloud as the cause of all their problems.
(3) Star Fleet officers must learn about the jobs of others, for we see Worf studying engineering.
(4) Wesley utters the universal truism that we learn best on the job and not in the classroom. He studies a theory on dilithium crystals and warp speed, apparently Dr. Channing has an idea that the crystals would be more useful if matter and anitmatter could be aligned better.
(5) Data learns about Sherlock Holmes and starts using the Holmes inductive/deductive method to solve the mysterious ship malfunctions. But he doesn't get to solve the case or successfully use his reasoning since the plot goes other places. He ends up just mimicking Holmes in superficial ways, with key phrases and a pipe. But Holmes will be back in later episodes!
(6) Deanna uses hypnosis. I have actually heard that only about 1 in 10 people are susceptible to hypnosis.
(7) Deanna comments about the duality in all people as they argue inside themselves, so she fails to notice that the energy being coexists in any of the crew.
(8) Picard becomes an energy being! The energy being enters him and beams it-and-Picard into the cloud to try to create a unified energy being. Somehow this doesn't erase anything important about Picard. Obviously this accepts some sort of belief in an informational component of human identity, so that we exist as 'soul' or 'form' more so than as matter, or perhaps the energy contained enough energy in it to keep Picard's matter information available for re-materialization. Very weird!
I didn't like the idea of the Captain turning into an energy being without complications to his identity. I thought additional explanation was needed, and if this was more like the excellent 'Where No One Has Gone Before' episode such an explanation would have been given (even if I would have thought it crazy!). It also seems strange for the energy being to coexist inside people and pass between them. This seems rather magical and more like a typical 'soul transfer' episode in a bad Season 3 episode of The Original Series of Star Trek or an episode out of 'Smallville'.
I love the ending, though, in which the Anticans might be trying to eat a missing Selay delegate! (The film 'A Boy and His Dog' has a similar idea in it.) Yes, it's a very yummy peace process!