I was under the impression it was a direct sequel in ways. Robert Patrick's character in Quality of Mercy is presumed to have died in capitivity. The aliens used his body to make a disguise based his likeness and released the alien spy as a repatriated prisioner of war in order to infilitrate the ranks of the remaining human survivors and sabatogue the mission in this episode.
I agree these two episodes demonstrate that Wright can write dark scifi. I mentioned these two episodes many months ago on SGUS.
I love this series. It's a shame MGM has largely ignored releasing this series on DVD. They released season 1 and haven't released anything else. A company in Canada has finally released all 7 seasons but the boxsets have horrible packaging and the episodes have been edited from their originals on Showtime. I've been thinking of buying them anyways since it looks unlikely the others will see a release from MGM.
From what I heard MGM gave up after season 1 DVDs didn't sell as much as they expected. Besides, there are the thematic collections (aliens, robots, space...). But they amount to only about 1/3 of the episodes, and as a fan I would be interested in buying the complete collection, even though there are some really bad and boring ones in between.
The editing is another issue. There was a lot of stuff in the originals, such as celebrity nudity (Alyssa Milano, Natasha Henstridge, Sofia Shinas...) and gore that got cut out as well as scenes that had to go due to time constraints. One of the DVD releases has them and another one doesn't, but I can't remember which - have to look it up.