Changing tacks (sailing term!), Theon tries to convince his father that his whole battle plan is misguided. He thinks Robb's men won't be so easy to defeat. But it seems to me that the key element of the plan is that Robb's men aren't currently defending the North, so it's ripe for the picking. If everything goes smoothly, they won't have to face Robb's main army until they've already occupied Winterfell. Theon's proposal is that Balon swear fealty to Robb, back up his claim to be King in the North and then Robb will give him the Iron Islands. Balon sneers at Theon and tells him that his brothers were warriors. Those would be the brothers that Ned Stark killed. I think it's worth mentioning that, since it seems to have grated on Balon's nerves. He seems like he holds a grudge, right? For example, he takes this opportunity to remind Theon that the family words are "We do not sow."
Aside: I hate that each of these families has its "words." I would prefer "slogan" or "motto." Even "mantra." But for some reason, it's just "words." As in "House Stark's words are 'Winter is coming.'" It's a weirdly flat phrasing. Like when Tyrion told Snow the Night's Watch was full of "rapers" instead of "rapists."
Anyway. The Greyjoys don't sow. Balon explains to Theon that it means they're not subjects or slaves. They don't plow or mine. They take. This ties into Balon's disdain for Theon buying his jewelry with money. I guess the idea is that the whole family refuses to work and insists on stealing everything they own. Balon tells Theon, "Your time with the wolves has made me weak." Theon points out that it wasn't his idea to be raised by Ned Stark. In fact, Balon gave him away and bent the knee to Robert Baratheon, which kind of conflicts with all this stuff about how the Greyjoys don't bow to anyone. Balon backhands him across the room. Theon wails about how he was given away like a dog and then gets cursed for coming home. Balon leaves. Yara mocks Theon for wanting his father to bow to his "other family." Theon insists that he has no other family. No, this is the family he has love for, the one where the father backhands him and he doesn't recognize his sister.
Now, off to King's Landing, where Tyrion and Shae are in the Hand's rooms. She complains that she's not allowed to leave on account of being a prostitute that Tyrion's father expressly disallowed him to bring to the city. Tyrion is reading something and would like Shae to keep her voice down. She shouts that Tywin Lannister is three hundred miles away. Tyrion offers to get her a job in the kitchens. But not as a cook -- as a fake scullion. A scullion, it turns out, is a kitchen wench who scrubs pots. She does not want to do this. Because it's beneath her dignity as a professional escort. Tyrion just wants to keep her alive and feels it's essential that Cersei never know about her. If Cersei knows Tyrion has a weakness, she will ruthlessly exploit it. Shae takes some offense at being called a weakness. And at being called a kitchen wench.