Nightmares and Daydreams was less of a filler episode that Painted Lady, but I would have rather lost Nightmares and Daydreams just because I liked the episode less

Aangs dreams were hilarious, but also unessisary, Aang hadn't really expressed any fear of facing OZAI before, so a whole episode of build up to that confrontation (one that doesn't happen anyway) wasn't REALLY needed

the thing that episode did that WAS important was showing how unhappy Zuko had become after returning to his fathers good graces...but then again The Avatar and the FIRELORD and The Beach had already shown us enough of that so that when Zuko changes sides during the invasion its not the huge strech it could have been