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While devoid of much island mythology, this episode of Lost shed tons of light on Miles, a heretofore mysterious character. Let's review the development from "Some Like It Hoth," beginning with Miles' series of flashbacks...
When the show begins, we're instantly in the past. Miles is a young boy and his mother - who fans ought to recognize as Dr. Pierre Chang's wife - is renting an apartment for her and her son. All of a sudden, she and the landlord hear Miles (who is roughly eight years old) screaming. They run to him. He's inside the apartment of a dead man, and Miles is going on about how that dead man is still talking to him.
The next flashback takes place when Miles is a (heavily-pierced, spiky-haired) teenager. He's visiting his sick mother. Her hair is falling out and she appears to be close to the end, as a result of cancer. Miles is there to ask about his father. After initially refusing to talk about him, Mrs. Miles reveals a series of details about her ex-husband: he's been dead for many years; he kicked her and Miles out when Miles was only a few months old; and where is he buried, Miles asks? In a place he can never go to, she replies.
With his ability to listen to the dead now confirmed, the third flashback focuses on Miles' occupation: he makes money off those in mourning. In this scene, Miles - a fully-grown adult - is speaking to a grieving father whose son recently passed away. The father wants Miles to tell him if his dead son knows that his dad loved him. Miles seems a bit hesitant, but he grabs the father's hands, closes his eyes and relays the news that, yes, the son was aware of his father's love.
Miles pockets the dad's cash and is approached by a woman as he leaves the hour. It's Naomi. She says her employer has heard about Miles' talent and she'd like to discuss a job opportunity.
In the final flashback of the night, Naomi takes Miles into the back of a restaurant. A dead body is there. As an audition, Naomi asks Miles to tell her all he can about the deceased individual. Miles passes the test and Naomi reveals the job opportunity: become part of an island expedition to apprehend someone responsible for numerous deaths on said island. They need Miles to come along in order to speak with all the dead bodies on the island that this man (Ben, obviously) is responsible for killing. At first, Miles says no... until Naomi tells him the fee he'll be paid: $1.6 million.
We then see Miles walking down a street. A van pulls up and he's pulled inside. A man that identifies himself as Bram - and who we saw last week on the island, alongside Ilana during her gun raid/strange questioning - tells Miles that he's making a mistake. Don't go on Naomi's mission. Stick with him and his crew because Miles isn't ready to go to the island yet. How does Bram know this? He asks Miles: "What lies in the shadow of the statue?" and Miles has no idea (neither do we). Miles says, sure, he'll stay with Bram... if he pays him double Widmore's fee, $3.2 million. Bram scoffs, drops Miles off on the street again and tells him he's playing for the wrong team. How mysterious.
Now, let's go back to 1977. Miles is contacted on his walkie talkie by Sawyer. He tells Miles to destroy the security footage that shows him and Kate taking Kate to The Others. Miles agrees, but before he can follow through, Horace walks in. With LaFleur gone, he needs help from Miles: deliver something to Radzinsky, take a package back from Radzinsky - and ask no questions.
Miles heads off on the mission, but forgets to take the security tape first. When he gets to Radzinsky, he's greeted by a dead body. The package Miles is delivering is a body bag and Radzinsky's men toss a man, who looks to have been shot in the head, into it. Confused, Miles takes the body back to Horace. Horace now as another job for him: take this body to The Orchid and deliver it to Dr. Chang.
(Through his ability, Miles learns that the dead guy's name is Alvarez and he was killed when his filling shot through his head... likely due to electromagnetic energy?)
Miles tries to say no - he clearly knows at this point that Chang is his father - but Horace insists. At the van, Miles runs into Hurley, who is taking sandwiches to The Orchid. Let's go together, he says. As a result, Hurley sits shotgun as Miles drives out to The Orchid. But Hurley quickly smells the corpse, insists they pull over and discovers the body. He promises to keep it a secret and also tells Miles it's cool, he speaks to dead people himself (Mr. Eko, Charlie, etc.). At first, Miles plays dumb, but he then relents and admits his ability to Hurley.
They arrive at The Orchid. Chang is screaming at everyone, including Miles for including Hurley in the mission. He tells Hurley that if he says a word about it, he'll be sent to Hydra Island to clean up polar bear feces. Chang then tells Miles and Hurley to drive him somewhere. They end up at a construction site, where Chang exits. What are they building there? Hurley knows. It's the hatch.
(At one point, we see the numbers being read off as the hatch door's serial code. Does this mean they became special only after the hatch was created? Or they were pre-determined to be the serial code? Or what?!?)
On the drive back, Hurley tries to get Miles to open up about his dad. Miles won't. He says he never knew him, doesn't have an interest in knowing him. Later on, Hurley delivers a funny, inspirational speech, using Empire Strikes Back as a parallel for why Miles ought to communicate with his father. (Humorous side note: Hurley is also writing in a journal throughout the episode; we learn he's writing the screen play for the Star Wars sequel, with a few changes, to send to George Lucas.)
The speech works, as a teary-eyed Miles is walking toward Chang's cabin near the end of the episode. He sees his father, looking quite loving, reading to the baby version of himself. It's too much for Miles to take, but as he walks away, Chang comes out. He needs Miles to drive him to the dock. A sub has arrived, carrying scientists from Ann Arbor. Miles agrees, gets to the dock and is greeted there by a familiar face: Daniel Farady. "Long time, no see," he says to Miles, as the episode ends.
** In quick, other storyline news: one of Sawyer's men finds the security tape and approached Sawyer about it. Sawyer invited him into his house to talk about it, punched him in the face and told Juliette to get some rope.
** Ben's father is told by Juliette that his son has been abducted from the infirmary. He later grows suspicous about Kate when she tries to comfort him. He expresses these suspicions to Jack - janitor bonding! - and Jack just tells him he's drunk. Later on, Jack relays this conversation to Sawyer, appearing quite happy to not be in charge for a change.
** Easter Egg of the Episode: Dharma school children evidently study Egyptology and hieroglyphics, based on what was visible on the blackboard in a classroom Jack was cleaning.