When Rick Berman takes a story credit in the TNG era, you might assume something major is afoot (see the forthcoming "Unification"). And yet "Ensign Ro" wasn't originally conceived as the backstory it ultimately would provide for Deep Space Nine. A cornerstone of DS9's development would ultimately grow from the pieces put in place in this episode — and the new series would be in full-scale production less than a year later — but there apparently was no master plan at the time "Ensign Ro" was written.
A terrorist attack on a Federation colony is said to have been committed by a group of Bajorans (frequently and inconsistently referred to as "Bajora" in this episode). Admiral Kennelly (Cliff Potts) orders Picard to track down the perpetrators amid a politically sensitive situation, and forces Picard to take with him as a special adviser the confrontational Ensign Ro Laren (Michelle Forbes in a memorably abrasive and yet still sympathetic performance), released from prison specifically to help Picard navigate these tricky waters. (She was sent to prison after being court-martialed for disobeying orders that resulted in the deaths of several fellow Starfleet officers.)
Aboard the Enterprise, Ro has a rare electrifying presence. Most of the crew wants nothing to do with her based on her tarnished reputation alone, and Ro projects the very public position of wanting nothing to do with any of them. She's blunt and tells it like it is. TNG is famous for its general lack of interpersonal conflict — a rule that "Ensign Ro" is willing to suspend. Watching this, you can see the dramatic benefits of conflict (and why the no-conflict rule would be dropped for DS9).
One person who sees through Ro's leave-me-alone persona is the seen-it-all Guinan, who opts for a kill-her-with-kindness approach, and ultimately declares Ro her friend. This will ultimately be Ro's salvation, as being friends with Guinan means Picard will be more apt to listen to you, which proves important when it's revealed that Ro has a very unique problem: She was put on this assignment to deliver the Bajoran terrorists to the Cardassians on behalf of Admiral Kennelly and is caught as a pawn in the middle of a web of political intrigue.
The plot execution is nothing to write home about. The Enterprise tracks down the Bajoran cell leader and it turns out he didn't attack the Federation colony at all; the Cardassians attacked the colony and framed the Bajorans in the hopes of provoking the Federation to do their dirty work in finding the Bajorans for them. Kennelly is the patsy who buys into the plot and conspires with the Cardassians to deliver the Bajorans. These plot details play out with fairly low wattage (in stark contrast to the energy that Ro herself brings to the Enterprise).
Of more value is the character of Ro herself, who ultimately joins the Enterprise crew and promises to be an interesting addition. And it's always nice to add a little more complexity in near orbit of the paradise that is the Federation. The creation of the Bajorans as galactic ethnic nomads that have been destroyed and scattered as the result of a brutal Cardassian occupation — well, I wonder what might come of that?