In the very first episode of the Fringe series, Olivia Dunham is investigating an international flight where it appears that all of the passenger's skin has just melted away. She begins to investigate on orders from Phillip Broyles, when her partner John Scott who is then badly wounded with the same compound that was used on the flight. She enlists the help of Dr. Walter Bishop and his son, Peter Bishop, to help discover a cure for this odd affliction.
But where is our good friend the observer? I must say that in this first episode, the observer is difficult to find. I give it a difficulty rating of medium, so don't feel to bad if you missed him. He is walking on the opposite sidewalk from Olivia when she gets out of a car outside of Massive Dynamic, about 55 minutes and 41 seconds through on the DVD if you want to check it out. The picture is below, the observer is on the right. I placed a red box for the people who really suck at games like "Where is Waldo?".