Totally agree (I never liked the idea of him being a new baby Kenny everytime he died, and always assumed that was just a theory one of the boys came up with to explain why Kenny always comes back to life...now, unless it's addressed in the next episode, I'm going to assume that the "new baby" gag was a theory of Kenny's instead).
Last week's ep was a bit of a let-down for me, this week's ep was freaking awesome and did not disappoint at all. I love the character development we got here for Kenny-and feel really bad for him as well.
This is easily one of my favorite episodes of this show, and I can't wait to see what they do next week.