Sylar visited Parkman and threatened to kill Janice if the latter didn't go into Sylar's brain and get rid of all his abilities. (Really?!? Suddently Sylar was cool with being a normal human being?) Parkman did as he was told, but he lied about actually helping Sylar. He buried the guy's abilities and trapped Sylar in his biggest nightmare: a lonely existence.
With Sylar, for some reason, in a catatonic state, Parkman proceeded to brick him up - inside his own basement!!! - until Peter knocked on the door, stole Parkman's ability, read his mind, learned of Sylar's whereabouts and tried to rescue him because his dream showed Sylar actually saving lives. But Peter ended up in the same lonely nightmare as Sylar when he touched his nemesis. Ummm... ok.
The other storyline involved HRG's attempt to take down Samuel. Claire went to warn the others at the carnival because she cared about them and she seemed to convince Samuel to turn himself in. But Samuel had another plan. He had Eli shoot at the carnival so all the folks there would think it was HRG.
He even had Eli shoot and kill Lydia. When Eli returned with HRG, he held up a rifle and said HRG had been the culprit. (Lauren was also wounded in this shootout and called Tracy for help... naturally). The carnies all wanted blood, but Samuel had them tie HRG in the house of mirrors and put Claire in his trailer.
The episode ended with Samuel saying they'd never be accepted in society. Therefore, friends, let's show the world what we can truly do!
Source: TV Fanatic