My AHA moment came when Desmond said that he had experienced a memory, not a dream.
I believe the memory tests that Charlotte was doing on Daniel, were to test his recollection of having done this before. Daniel needs to remember last time in order to correct the future outcome this time around. He was crying in his first scene because he had done this before and something did not work out as planned. Ugh, this is so Back to the Future!So my real question is were the "memory tests" really testing Daniel's memory or were the cards that were being dealt actually different this time around?
As for his being less pschitzy, maybe the more he remembers the more clarity he gains.
I think Daniel going back to the Orchid to sabotage the station in some way so that time stops skipping makes sense. If he can make the Island stationary in space/time it will be easier for them to be located, but stop the head-ache of jumping around.