Sid's ex-wife, Susan, comes to the cul-de-sac where her motives are questioned by Sid and Karen.

Diana is having difficulty with her new boyfriend as she feels a pressure to sleep with him. Karen, Diana, Val and Ginger are performing in an ERA benefit. Val asks Gary to help, but he's too preoccupied helping Earl Trent. Diana needs Karen's support but she is too busy rehearsing. In frustration, Diana pulls out of the ERA. Meanwhile with Laura preoccupied with work, Richard spends his time with Abby and they end up in the hot tub. Karen and Diana make up and sing, ""Put on a Happy Face"".

Linda asks Sid to go away to a race for the weekend. Sid decides not to go, but doesn't pick up on the fact that Linda's interested in him romantically. Gary sells the illegal parts to Sid's supplier so that Sid won't know about it. Laura tries to initiate romance with Richard, but he rejects her. Meanwhile, Abby has started to reject him. Abby and Judy argue over who will 'get' Gary. Judy tells Val that she and Gary are having an affair and love each other. Gary finds Val at the beach. She slaps Gary but they make up. Judy comes to KLMotors the next day. Gary's mad that she told Val, and says he will never leave Val. Judy leaves, and Abby says ""Are you ready for ME now Gary?""

Kenny goes to see Ginger at school and implores her to get back together with him. She still refuses. Kenny shows up at her Lamaze class and they argue. Ginger feels bad, and finally tells him that both she and the baby need him. Val's doctor finds a malignant growth in her colon and needs to operate. Gary can't handle it - he feels so guilty about how he's treated Val, and totally breaks down. He calls Miss Ellie weeping, so Bobby comes to support him while Val's in the hospital. The doctor is able to remove all of the cancer.

The Fairgates are in turmoil. Michael is terrified that Karen will die, and constantly checks up on her. Eric cries in Sid's antique car, and then is very upset when Karen sells it. Diana's upset that Karen is acting like a robot and won't talk about her feelings. Karen is putting on a strong front, but is angry with everyone. She's angry with Sid for dying on them. At work, she fires Abby and goes off on Gary and starts slapping and hitting him. Val confronts Karen and tells her she's hurting the people she loves. Karen syas she is terrified without Sid, and scared that if she lets herself feel she'll just blow. Ginger has her baby- a girl named Erin Molly. Karen visits them at the hospital, and they ask her to be the godmother. As Karen holds the baby, she breaks down weeping.

Karen's old boyfriend, Teddy Becker, comes to visit. Teddy is convinced that Diana is his daughter, but Karen assures him that she is Sid's. After hearing Teddy tell Diana that his sons asked to be adopted by their stepfather, Karen decided to let him think that Diana could be his. However, Karen shows Diana a photo of Sid's grandmother, who looks exactly like Diana. Richard gives Laura a new car for her Christmas gift, but then Scooter comes by with a brand new Mercedes for her. Val is upset by past Christmas memories of her when her father died and Lilimae abandoned her. Gary reminds Val that Lilimae was only 14 when she got married, so Val should give her a break. Lilimae gives Val a quilt and they make up.

Laura takes the neighborhood women with her to check out an estate to sell. The estate is rumored to be haunted by the three sisters who lived there. The women must spend the night when Karen's car won't start. The ghosts of the sisters want Val to join them and be their mother, and try to get her to jump off the roof. On the roof, Lilimae is able to talk Val out of her trance, and she doesn't jump.

Kenny and Gary almost come to blows. Jeff offers Kenny a job, but he declines. Ginger tells Gary that it was Abby who cut Kenny out, not Jeff, and that Gary better wake up. Chip convinces Ciji to get an abortion, but after spending time with Laura's kids, she changes her mind. Val asks Chip if he stole 2 chapters from her book, but he denies it. Val helps Mac pick out an engagement ring for Karen. He proposes to Karen, who answers ""probably"". Karen's old boyfriend Teddy Becker is back in town, and Mac's really jealous. He and Karen break up, and Teddy wants to get back with her. Val tells Karen she's being foolish. Karen finally tells Mac she really loves him. He proposes again, and this time she says yes.