This may have been our favorite Mad Men episode of all-time. All three storylines were exceptionally done, each reflecting something much larger about the show.
Let's start with Pete. He's upset because Ken appears to have the best accounts. For now, Pete is focused on Admiral, a television maker whose sales have flattened. Except in one areas: cirites with a large "Negro" population (his word choice, of course).
As part of his market research, Pete speaks with Hollis, the elevator attendant, about what kind of TV he has. As usual, Pete is completely oblivious to how obnoxious his actions and words are, as his questioning implies that Hollis speaks for all African-Americans. Pete doesn't understand why the conversation is offensive.
Inspired by his data, Pete pitches Admiral on a campaign that will focus on the Negro market, telling the company to advertise in magazines such as Ebony. The response is far from good, as Roger and Burt later tell Pete when they rail him out: Admiral has no interest in integrating its advertising campaign; or, especailly, focusing on just black consumers. Again, Pete cannot reconcile this, as he was just trying to make the best financial deal.
Lane Pryce, who was pinching pennies as best he could throughout the episode, speaks up, however, and says that the firm should think about this demographic because "something is happening" in America with blacks. He's got that right.
Meanwhile, Pete's next problem intersects with Peggy. Each is asked to lunch by Duck, who has found work at a competing ad firm, Grey. He wants them both to come aboard, even inviting both to lunch together, unbeknownst to one another. Pete barely stays to hear Duck's pitch, as he's offended at being wooed along with the woman that gave away his child.
After Pete leaves the lunch, though, Duck turns to Peggy. He says it's "her time." As a result, Peggy enters Don's office later and asks for a raise. He says there's no money. She seems unsure what to do, as she wants to take advantage of her time to move up in the world. When Pete sees Peggy leaving Don's office, he asks if she's revealed Duck's job offer (she did not). Peggy says it's none of his business, but Pete shoots back: "Your decisions affect me." We somehow doubt he's talking about just this instance.
Finally, there's Don and Betty. The latter goes into labor and the couple goes to the hospital. Once there, Don is sent to the waiting room. He bonds with a prison guard named Dennis there, who is nervously awaiting the birth of his first child. His mood is contrasted with Don's, who is as cool and as relaxed as ever. But Don realizes that he's too detatched from the moment - and his life, really - as Dennis talks anxiously and excitedly about his first kid.
Once Dennis learns he has a son, he vows to Don that he'll be a better person going forward. This appears to have an effect on everyone's favorite advertising exec.
As for Betty, she's in a haze as she prepares to give birth. She sees visions of her late father and even her late mother in one dream sequence. (She also curses out Don during one exchange with the nurse.) When her son is born, Betty names him Eugene Scott Draper, after her dad. (When she tells Don of the name, he says that decision can wait; he even tells people at work that no name is selected yet.)
Upon getting home, Betty actually smiles! She seems newly inspired with the addition to her family... until Gene cries in the middle of the night. Betty gets up to take care of him, pausing in the hallway to collect herself as the episode fades to black.