Felon said:
So, what happened? Did twin Lex discover Clark's true nature only to be conveniently erased just before he could reveal it?
Smart Aleck.

Yes.
SPOILERS AHOY
I watched it, hackneyed though the plot was, but it served ONE (and only ONE) purpose: To bring Lionel back as his old self. Lex beat some evil-sense back into him, by making him strike him in a fencing duel. They could have accomplished this with some other means (say, one of Lionel's old crime-boss friends coming back and reminding him of what a "pansy-whipped" version of himself he was), but I'm waiting to see what it really does mean in the end. Apparently, even Clark's goodness-vibe can't fix Lionel's inky-blackity-black-dark-as-a-coalmine soul.
It had one other purpose, putting a strain on Lex's and Lana's relationship by revealing to Lana that Lex had secret-lusty-pirate-feelings for her, but that depends on if they do anything with that in the future, or if they just write it off like it never happened.
Chloe's relevance is building, with the little pow-wow she and Clark had over the goodness of sharing your secrets with those closest to you, and it makes me think she'll either die or be written off soon, because they're dropping hints like free matchbooks.
"You're always around when I need you, Clark - I hope I can return the favor someday."
"You share your secrets with those you love, because otherwise you're all alone."
Yeah, she's as good as gone.
