I still think she is a spy, but not for the group that seems to be taking the kids, rather I think she is part of the other others, and they are trying to protect the kids.
I also think the whole story about her on the plane was very fishy, when she asked Hurley if he remembered it was more like she already had him hypnotised and she was attempting to implant a false memory.
In any case, I don't think Ethan was talking to Zeke. Zeke would have had a beard shortly afterwards when they abducted Walt, so he couldn't have been clean-shaven at that point. Also, he talks about "what's HE going to do" or something, referring to another person he seemed to fear, who I'm assuming was Zeke himself.
Well that guy Ethan was talking too certainly sounded like Zeke and many people have posted that he was probably wearing the disguise Kate found, when they abducted Walt
Also, I felt that the look of concern that Libby had when Claire asked for her help was Libby thinking "Oh no, I have no idea how get her memories back, I better think of something believable"
As this episode seems to indicate Ethan was the only spy in the original camp, I think it's quite unlikely that Libby is a spy/Other, but she's certainly not telling the whole truth to the losties! I expect we'll get a very nice storyline out of her.
I loved the editing in the scene when Kate & Claire said to Libby, "You help people remember things, right?" And the camera immediately cut to Hurley for one second. For a time I was thinking that perhaps Libby was a doctor at Hurley's institution, but after that therapy session, I don't think so. Now I'm wondering if she was a patient with him.