I'm thinking it might have something to do with witches. Series creator Ryan Murphy said there was a very tiny clue as to what Season 3 will be about in this episode and when "I Put a Spell On You" came on the jukebox I immediately thought of witches.
Maybe they will go further back in time and do a Salem Witch Trials season.
And last night's episode was really good and that song-and-dance number came out of left field but it didn't feel out of place at all; it was just one more bizarre thing in a weird ass show.