I know Seth stated in his twitter that it's canon, but I'm a bit reluctant since he put quotation marks on it. That's usually an alarm indicating that he may or may not be pulling our legs (or maybe I'm going crazy since I usually do that when I'm being facetious). I really do hope it is canon because the idea of killing of a few recurring characters and putting one in jail is a gutsy move for a show like Family Guy and a brilliant, welcome addition to the show. This is the same show that had Meg riddled with spears in one episode, for Pete's sake. One can wonder if this will have any effect on the overall show later on. *shrugs*
It was a fantastic one-hour opener. The CGI at the beginning (and elsewhere) are painful as hell (the water especially looks terrible) which is irritating because they've been pretty good about it in prior episodes, but it's not supersaturated enough to bother me. Though the show is largely a comedy, the brief, silent moments where characters wander around the mansion adds that rare, atmospheric touch. I also enjoyed the overall plot because I tend to like "And Then There Were None" type of story.
I agree with GWOtaku that the repeated fat jokes got annoying, but otherwise, this is an exceptionally strong episode and quite possibly the best Family Guy opener yet, even moreso then the Multi-universe one with Brian and Stewie.