Littlefinger and Lord Stark stroll through a courtyard so that Littlefinger can be clever at Ned. He knows that Ned's reading a boring book. Man, this castle has terrible gossip. Especially because even Ned knows that this particular piece of information had to have come from Pycelle. Littlefinger asks if Ned knows Ser Hugh of the Vale. He does not, although he's a little interested in the fact that that's Jon Arryn's old squire, who got knighted suddenly. Littlefinger apparently still feels the need to show off and points out various people, who are spies for Varys, the Queen, and Littlefinger himself. Littlefinger claims that they're all spying specifically on Ned, but it looks like they were just sitting still while Ned walked past them. That seems like an easy job, since most days your Spy Report is just going to say, "Did needlepoint in the East Garden as instructed. Lord Stark did not walk past me talking in a loud voice about secret conspiracies." Littlefinger asks if Ned has someone in his service that he trusts completely. He says yes, which is, of course, the wrong answer. He should send this mythical trustworthy person to talk to Hugh and then send him to visit a certain armorer. Ned is touched: "Perhaps I was wrong to distrust you." Even that isn't enough to keep Littlefinger from being smug: "Distrusting me was the wisest thing you've done since you climbed off your horse."
Ser Hugh is found pacing off the jousting area. Well, he's walking strangely, so I assume he's pacing something off. I don't know why he'd need to do that, though, since it looks like all the distances have already been marked off. If there are even any distances required. Don't horses just start at either end and ride toward the center? I guess he might be trying to verify where the center is. Whatever he's doing, he doesn't want to be interrupted by the person Lord Stark sent, because he's now Ser Hugh, a full-fledged knight and he doesn't talk to people who are beneath him. Fine, then.