Windmark is listening to that Nina Sharp phone call about the child Observer with that special technology again when another Observer comes in to say they've received word that "he'll see you now." Windmark gets himself ready (i.e. puts on his hat) and instructs the underling to alert him any developments. He picks up his briefcase, turns around and steps...
...right into Manhattan in 2609 -- the floating letters include the Observer language. I can only imagine that Observers six-hundred years from now complain, "I have to press 1 for Observo-speak? I thought this was America!"
Back in the present day (well, 2036, anyway), the Fringe team has arrived in Williamsburg -- the bridge replaced by the ubiquitous LRT -- and a confident Walter gets his bearings and heads off to where he was looking out from. Peter has to jog to catch up to him and is all, WTF, Walter? Walter says he feels good. "From where I'm standing, you don't seem good; you seem amazing, which is a little scary," says Peter, and Walter tells Capt. Bringdown not to worry about him, but Peter reminds Walter that he asked Peter to help him stay grounded: "You were so afraid of becoming the man that you used to be, you asked Nina to remove pieces of your brain. Again," he says, in case Walter forgot about his requested brain surgery. Walter hasn't forgotten, but he says the procedure is no longer necessary; when Michael touched him, he showed Walter more than just images, and all at once he understood that everything he thought he knew could fit into a thimble. Well, I can see why that would make him happy!
But there's more: Walter remembers things he hasn't experienced, and he thinks they're from the other timeline, before Peter was erased and the timeline reset: "I remember when you came to me at St. Claire's. My first words: 'I thought you'd be fatter.'" Ha! Oh, nostalgia. Walter's getting choked up at this walk down Memory Lane, which includes reminiscences of making a peanut butter sandwich and Peter slipping up and calling him "Dad," and the terror Walter felt before Peter stepped into The Machine. "I told you I've never been good at letting you go, and you said..." "...this time you're gonna have to," finishes Peter. Peter's not unhappy for Walter but still concerned about how Michael could have enabled Walter to see a life he didn't live. Given the Observers' access to other times and timelines, it doesn't seem like that big a puzzle.