That was a pretty good episode. I'll probably re-watch it on October 31st to celebrate Halloween, as Bal Masque is like a Monster Mash party just waiting to happen.
The opening fight involving Sydonay was excellent, as others mentioned. Visually, the episode was very nice. A nice collage of various character moments. I fanboyed a bit when Dantalion made his appearance. I always loved that mad scientist!
Similar to what Archon_Wing said, though, I'm actually kind of missing the SoL moments a bit (never thought I'd write that after the first half of Shana's second season, lol).
I think that the Shana anime works best when there's a down-to-Earth human element that serves to ground everything, and make it easier to get emotionally involved in what's happening. Satou provides a tiny bit of that, but not as much as I would like to see.
Still, Episode 2 was pretty good overall, and Episode 3 looks promising on the "human element" front.
8/10 for this episode for me.