We start on Cybertron this time, as apposed to Caminus in the first episode, and we quickly change to a shot from what I'm assuming is Starscream, as it cuts back and we see him flying just a moment later. Starscream is on a reconnaissance mission, to gather information on the state of Cybertron. On his flyover, he witnesses some bombs going off on the surface below.
From this vantage point it almost looks like Starscream was the one that dropped the bombs, but I seriously doubt this is the case.
We pan backwards, as mentioned before, to see the Decepticon fly to a large silver building. Here again we have an issue with the choppy animation. As mentioned previously on the boards, Starscream appears really choppy, while the background moves fluidly with the camera.

Starscream enters the building
Starscream enters the building from a top landing bay, and slowly descends using the thrusters on his feet. He lands and meets with Rodimus and, randomly, the Mistress of Flame. These bots are apart of the "Council" we've been hearing about.
They discuss the state and threat of the combiners, and how word of Computron and Menasor's fight has broken out on Cybertron. This is why there's so much unrest on the planet. Peace has been achieved between the AutoBots and Decepticons - and the council doesn't want to ruin that. They all consider using the "Enigma of Combination" for one reason or another. Rodimus wants to use it to take over an army of combiners, turning a threat into an asset. The Mistress wants to use it to wipe out all the combiners in one felled swoop. Starscream has an objection to this, as the combiners are transformers, too. Wiping them all out would be genocide. Besides, some of the Combiners have been loyal to, even fought for, the council.
Rodimus and the Mistress of Flame are introduced to the series
The Mistress feels it isn't Starscream's place to talk about killing other transformers, given his past. We also learn in this discussion that not only is Optimus Prime in hiding, but Megatron as well.
See, now we're getting somewhere. Now we have a story to work with. One that plays with the original concept that was proposed, and not too terribly I might add. There are still some issues, such as some of the lines delivered are a bit stiff, and the mouth-movement-to-actual-voice-and-words is way off and not ignore-able, but it goes leaps and bounds above episode one. But we're not done yet.
We start to view the council meeting through the scope of a sniper rifle. It targets Rodimus, Starscream, and the Mistress. The council walks over to the Enigma of Combination, and agree they should study all it's powers before making any brash decisions.
A sniper sets up an attack on the council
The sniper is revealed to be Windblade, set on stopping the council one way or another. She decides to fire at the Enigma, and somehow misses. She hits Starscream in the shoulder, and he falls. Another problem I have is right here. There's such a weird, delayed reaction to Starscream being shot by the rest of the council. There's a good two seconds before they really do anything. The Dialogue and sound effects become a little clunky here, as the Mistress raises the alarm and Rodimus checks on the former Decepticon.
The Enigma of Combination
We return to Windblade. She hears a noise behind her and immediately jumps and turns around. It's revealed to be Optimus Prime, now out of exile. He still doesn't say anything, and the episode ends pretty much on the same shot as the previous one.
Overall, episode two is a lot better than episode one. It gives us actual emotions, and actual dilemmas for the characters to face. It still suffers from that 5 minute time constraint, and trying to make people understand a whole new continuity with a new story line in 5 minutes in near-impossible. My only wish is that the past to episodes would have had a bit more of each other in them. Meaning, episode one, the hard-to-follow action-feast that it was, could have definitely used a little more (or, a lot more) story. And, on the flip side, episode two could have used a bit more battles and action. But, all in all, you're starting to win me back Machinima. That Wheeljack name-drop didn't hurt, either.