I think one of the reasons "State of Flux" works so well is because, under scrutiny, it makes a hell of a lot of sense. It's an episode that considers Voyager's premise, builds on the Kazon which were introduced in the pilot, has an interesting plot with ends that meet, and makes a character deal with a tough personal situation.
The last item in particular is what Voyager has done best so far this season. The season's best shows to date—"Prime Factors," "Eye of the Needle," "The Cloud"—all work because they put characters in tough emotional situations that they must deal with and put behind them before continuing with their long voyage.
In "State of Flux," the crew encounters the Kazon while on an away mission. After beaming up and leaving the area without a major incident (aside from Chakotay and Seska exchanging some phaser-fire with some Kazon in a cave), Janeway receives an urgent distress call—it's from the same Kazon ship encountered at the planet.
Some new technology has apparently blown up in their faces, and after a rescue attempt that retrieves only one Kazon survivor, Torres finds that the technology was a food replicator taken from the Voyager. There's only one explanation—a traitor on board. Somebody gave the Kazon the unit so it could be analyzed and transporter technology could be brought to the Delta Quadrant.
But who is the traitor? It could be anybody, but most likely someone on the engineering team. Was it Carey, who may be angry because he was passed up for the chief engineer position? Or perhaps Seska, who may have actually been in the cave to rendezvous with the Kazon?
Most of the show centers around Chakotay and Seska (Martha Hackett returns in the role of a Maquis crew member who has always been outspoken with her dissatisfaction of Captain Janeway). The show makes it clear that Chakotay and Seska were once intimately involved in the old Maquis days, before they were pulled into the Delta Quadrant. But a sensible scene where Seska brings Chakotay some mushroom soup—which she has stolen from Neelix's storage—shows Seska in a position with responsibilities and guidelines which she has no desire or intention of following, whereas Chakotay has adapted and accepted his Starfleet job.
The question "State of Flux" poses is whether or not Seska is guilty of treason—and, for once, this is a question that is successfully mired in a complex plot that (1) is not always obvious, (2) cannot be predicted so easily, and (3) works plausibly given the events and the past actions of the characters. As a mystery, the show works well, because the plot carefully holds back just enough information so that we aren't sure whether or not Seska is guilty, but we can follow and fully believe the events and revelations that unfold as Tuvok and Chakotay's investigation progresses.
For example, there's the mystery of why Seska hasn't "gotten around" to having her blood sample put on file. When Doc finally forces the issue, he discovers that Seska is missing key Bajoran properties. He tells Janeway that Seska is not a Bajoran—probably a Cardassian (who possibly infiltrated Chakotay's Maquis crew). But the episode throws several subtly-played smokescreens at us, playing the event down so that we're not completely sure what exactly it means, if anything. Seska claims the blood anomalies were caused by a childhood Bajoran disease that swept through her camp during the Occupation. And when she explains this to Chakotay, she's so convincing and innocent-looking that the scene makes us wonder if Seska is truly the guilty party, or just a victim in a framing scheme.
Ultimately, the mystery's solution hangs on a trap Chakotay and Tuvok devise, based on some information Chakotay feeds both Seska and Carey. As the traitor's computer-hacking cover-up attempts reveal the guilty party, the show comes together in a closing scene that skillfully ties all loose ends together.
Actually, the show could've ended in one of two ways, and still worked: (1) Seska could be the victim of a framing by Carey, or (2) Seska could be a very guilty and clever traitor. The former option would still be believable, but the latter option, which the show wisely takes, is much more powerful. Seska dealing with the Kazon follows, to the letter, from what we've seen from her character in past episodes. And when we learn that she is, in fact, a Cardassian spy altered to look Bajoran, it has a real reason: it gives the character an added edge of attitudes—attitudes that explain everything she does.
You can't just give the Kazon technology like this, Janeway says. It could shift the balance of power in the quadrant. But if we forge an alliance now, Seska replies, the shift would be in our favor. "That is all that matters at this point," she says icily. And once she's found out, Seska turns on a dime (in a charged dialog scene) from a soft and innocent-seeming Bajoran to a glaring, menacing Cardassian personality who calls the captain a fool to her face, and calls Chakotay a fool for following her. "I can't imagine how I ever loved you," she says to him, and then beams onto a Kazon ship and escapes. Ouch.
Hackett's performance is one of the show's highlights, particularly in this final scene. But I don't find just her performance enjoyable—I'm also pleased in the way the episode uses it to turn the plot into a cohesive whole, because it takes a character who has never been understanding or supportive of Janeway's Starfleet methods ("If this had been a Cardassian ship, we would be home now"), and uses her in a believably devious way. There are larger series-impacting statements here, too—the show demonstrates that the Voyager is still at least partially divided in its Starfleet/Maquis mentalities, and that maybe not all of the crew is willing to just lie down and accept its situation.
Then there's Chakotay's problems. Not only does he have to deal with integrating his rough-edged crew into a Starfleet environment; now he has former-lovers turning out to be crafty Cardassian agents who despise his Starfleet sentiments. At least Tuvok, who was also aboard Chakotay's Maquis ship, was fooled by Seska's treachery as well. Strange, Tuvok wonders, that Chakotay would find this failure comforting. "Misery loves company, Tuvok," Chakotay replies. Indeed.