*Spoilers ahead* This anime skips the manga parts in the world of Infinity (the chess-like goth world) and Celes (Fay's hometown), but actually starts off where they leave Celes and move into Kurogane's world in Nippon. It covers most of Volume 22 of the manga.
Significant parts of the story include Kurogane's sacrifice that is made so that he and his boyfriend can safely travel to Nippon.
While they are all healing, Seishirou pops his head in to goad Syaoran into a fight. As far as shonen fights go, the animation is lacking. There are some nice parts, but I think the people working on xxxHolic were more talented as making characters look...well, not like demented fanart.
Watanuki gets his two cents in, but the Other Syaoran's entrance ends the episode.
Overall impression ~ The animation was worse than Tokyo Revelations, but somewhat nicer than the tv series. This cast of seiyuu was as usual, forgettable. The opening song, SONIC BOOM, by Maaya Sakamoto was pretty nice as was the visuals. The ending, Kioku no Mori, by Fiction Junction Yuuka was decent, too. There was a surprisingly random flashback scene with Sakura holding Chii's head. If you compare the manga-to-anime interpretation of this to the recent xxxHolic OAD, this felt half-arsed. I think most people will point to the crappy animation and think why? $60? yeah right. The writing was also uneven and well, the highlights were the opening/ending songs and the way you can laugh at the deformed bodies. Let's hope that the 2nd one fairs a little better.