"The Deal" takes place during Michael's imprisonment by the Others--which was shown in flashbacks during "Three Minues" (2x22). The synopsis:
Michael is still tied up at decoy village when Juliet walks in and introduces herself. She tells him the boat he requested is his, so that he can take Walt away after he will have freed Ben. She comments that Walt is special, that he's not an ordinary boy, and that's why she is worried about him. Juliet is glad that Michael is going to get Walt away from the Island, and she assures him that they will keep their end of the bargain. She then reveals that she made her own deal with Ben, concerning her sister. When Michael questions why she would stay on the Island to save her sister, she asks in return if he would do anything to save Walt. Then she reminds him of the list he had been given, and wishes him good luck.