Here's a shot at a recap... admittedly I do not have a Tivo or other recording device, so I've only seen it once, so if I get any facts wrong, please do correct me...
===============================
Out of the Blue opens with Will happily married to a pregnant Abbey, causing single female fans of Sanctuary everywhere to question their reason for living (or at least so the writers would hope). All is not lost, however. The sight of a painting, coffee-drinking (gasp!) Magnus living next door reveals that Things Are Not As They Seem.
Sure enough, whenever Will and Magnus sleep, they wake up floating in a tank surrounded by lab technicians, who hurry to drug them and return them to the suburbs. Naturally, this interferes with Will's suburban career as a cardiovascular surgeon, and further pains Magnus, who is also dealing with divorce proceedings against her husband, Druitt (of course). More surprising is the fact that Druitt is apparently running for office and doing quite well, which makes one ponder the effectiveness of "Vote for me or I get all stabby" as a campaign slogan.
Magnus tries to figure out the meaning of the infinity symbols flashing in the corners of her vision, but is interrupted by sleep, bringing her back to the mysterious laboratory and face to face with Virgil St. Pierre. "You can't win!" he menaces at her menacingly. She glares defiantly, and the average life expectancy of the lab techs drops sharply in response as Magnus is put back to sleep.
Will and Magnus go back and forth between the two worlds, eventually getting over their initial neighborly dislike and realizing that they're in this together, even if they can't remember what the together part is based on. Eventually, they conclude that they are, in fact, in a dream, and decide the only way out is to commit suicide so that their minds cannot return to the dream state again. They hop in the car and drive off despite the frantic protests of Abbey and Druitt, then speed dangerously up the conveniently cliffy seaside road out of their subdivision.
Magnus floors it. The car smashes through the barrier and plunges down, down, down into the ocean.... and Magnus and Will awaken simultaneously. Fortunately, the lab techs have taken a coffee break (that or they are very, very fast runners with an excellent self-preservation instinct). Virgil appears, backed by Henry and Kate. They reveal that Magnus and Will were both attacked by a giant worm-type thing from Hollow Earth with a bite that may cause blurred vision, tingling of the extremities, nausea, shortness of breath, and insanity followed by certain death. There was no time to get Magnus and Will back to Sanctuary, so they're in Virgil's secret lab, where they have been kept unconscious while the venom wears off.
