You guys clearly improved the voice work nicely, the music wasn't overbearing, although some key-moments were over-exposed to effects (such as the evil puppets grating voice effect), but overall, nothing too bad, it was overly well done and clean.
The lighting has improved greatly, instead of getting that mushy green-dead-brown-metal filter which made everything look grey and blend into each other, this episode was much better balanced. The puppets had strong contrast colors to pop, but even so, the background actually felt black, instead of a mushy metal color.
The music choice was well chosen (could you guys tell me what it's called and where I could get it?).
The effects weren't too cheap, not too over-the-top, they simply did their job and were done. Although in retrospect, I would say keeps the effects more simple. I liked the fire-balls, but the Purple-Orb-Of-Doom was too tacky. Something simpler would have sufficed to say the least.
Overall, much improved guys. Kudos.