In the second episode of the Fringe series, the team investigates an infant child who was born, and then died of old age in the span of a few hours. This leads to a reopening of an unsolved murder case that Olivia and John had been investigating earlier that year. Based on the findings from that case, the killer is going to kill again, and the team must find him before he accomplishes that goal.
But where is the Observer? He is actually very easy to find in this episode, so if you don't find him then you may need the use of this site much more than others. At the very beginning right after the main title sequence, the team goes to examine the body of the infant/elderly man. As they pass the reception, the Observer is standing to their right (our left). The picture is below shows him and for your benefit, I have once again highlighted him with a red box.