When Jim and Cheryl get new neighbors, Cheryl is overjoyed, because they don't have any "couple friends". Jim doesn't care so much, and would be perfectly happy to just keep things they way that they are, without complications. But then their new friends borrow an old baby monitor because Jim and Cheryl have an extra and theirs hasn't been unpacked yet, and then the fun starts as it seems it's left on the same channel, and one night after going out, Jim and Cheryl get to listen in on the conversation.
They talk about Cheryl's beautiful hair and smile, and how Jim's pants were undone all night. Then they head to the bedroom and talk about "Little Winston", at which point Cheryl leaves, because their baby's name is not Winston. Jim, meanwhile, tunes in for a bit. The next day, Andy, Dana and the kids are listening in like it's a soap opera, trying to get the latest scoop - but at least there's no more of the bedroom talk (they do have some limits, it appears).
Everything is going fine until the next night when Jim and Cheryl have their new friends over for dinner and they serve those little cocktail weenies, which Jim unfortunately calls "Little Winstons", at which point the jig is up. Cheryl, naturally, is mortified, so she calls on Jim to save the day. The only thing to do is come up with something embarrassing that they can tell them in return and do it fast, so that they don't lose their new friends.
Jim turns Cheryl in for getting a "nose job" - fixing her deviated septum - but not only does that not work, it gets her mad. So he offers up that one time he went to see Spider-man, but since it was sold out, he saw Divine Secrets of the Ya-Ya Sisterhood instead - and he cried. That does a bit better, but their new friends are headed out the door, so Jim yells that he had a homosexual experience in college, and that brings them back long enough to ask about the name of the person, and Jim blurts out "Craig" while Cheryl says "Howard". Then they ask if he loved him and Jim pauses, and eventually says "yes". That brings the neighbors in they all eat.
The next night, we see Dana keenly listening on the monitor, so everyone must be at the neighbor's house, and the phone rings (on the monitor), and it's for Jim - sure enough, it's Craig Howard, and he wants to go antiquing! Then Andy walks through the door on his cell phone. Nice.