Most "Frasier" episodes are at least "good" (and even the "bad" episodes are funny), but this is one of the classics.
Looking for X-Men comics for his son at a fan convention, Frasier spots Jackson Hedley, whose acting inspired him and Niles as young men. Disappointed that such a fine actor has been reduced to playing an android on "Space Patrol", Frasier and Niles decide to produce a one-man show, in the hopes of reviving Hedley's stage career.
It's only after committing themselves to the show that they hear him act. Hedley's performance sets the platinum standard for overacting -- pretentious sighs, wheezy gasping, exaggerated emphases, inappropriate gestures, etc, etc, etc. Next to Hedley, William Shatner comes across as Max von Sydow. (It isn't clear whether Hedley is supposed to be a grotesque exaggeration of Shatner -- but it's hard to believe that an odious comparison /wasn't/ intended.) Frasier finds a video tape of an old Hedley performance, which confirms that he was always that bad. Niles and Frasier recognize that, 30 years ago, they just weren't good judges of acting.
The theater is packed on opening night, * and hoping to avoid embarrassment, they try every trick in the book to cancel the production. Frasier even sets off the sprinkler system -- which (the building being so old) clogs after a few seconds. Fortunately, Hedley slips in the puddle and injures himself. Unfortunately...
"Frasier" is likely the most-lavishly produced sitcom ever. The producers didn't hesitate to get A-list actors (eg, Eva Marie Saint as Roz's mother!). This episode not only has Derek Jacobi as Jackson Hedley, but Patrick Macnee as his father! One of /the/ classic sitcom episodes (for this series or any other), worth seeing just to enjoy Hedley's appalling skill at scenery chewing.
* The obvious question of why everyone else doesn't recognize Hedley as a miserable actor isn't addressed.