This episode introduced Penny, Donna's neighbor, and Baxter, the nebbish love of Donna's life. And then all Hell breaks loose.
Since the purpose of the webisodes was to try and garner broadcaster interest in the idea as a regular TV series, this episode was intended to introduce the other characters that would have rounded out Donna and Satan's world.
I think I should have made Penny even more Goth. Here she's kind of rocker-ish.