Yes, the episodes on the disk are in production order; that is, the order they were finished by Universal. With a live action show, production and continuity orders tend to be fairly similar... since shows are shot in a fairly linear fashion. With cartoons it's more complicated, since a swath of episodes are written and animated at once.
Order doesn't matter a GREAT deal on Wing Commander Academy. As AD notes, there is a proper 'timeline' order that you can watch them in, but much of that just won't matter.
Red and Blue comes first and the two-parted (Price of Victory/Glory of Sivar) comes last. The Last One Left should be second (since it's introducing the Tiger's Claw setting and several secondary characters) and then The Most Delicate Instrument third (since it introduces Archer's oft-referenced story arc.) Other aspects of watching in timeline order are more trivial... Blair mentions the events of Expendable in Chain of Command, Word of Honor in Recreation and so on.
I actually kind of like the production order regardless, though, as it gives you Chain of Command, the show's strongest episode, early in the run. When the show originally airead the early episodes were swapped around and you ended up having both the "they eject and are stuck on a planet" shows one after the other. Which sort of made manifest everyone's fears about fighter pilot shows, that they could only ever be coming up with excuses to get the characters out of the cockpit.
Another thing to note is that Red and Blue is by far the series' weakest episode... and it's very different in style and tone than the rest of the show. It's clearly FIRST, but you need to watch it with the understanding that that's not what the rest of the series is going to be like.
(As for the grey market; certainly boots of Wing Commander Academy exist--from my old VHSes!--but this release unquestionably looks much, much cleaner. Worth the $20 to be able to see it like no one ever has before.)
Yeah, although that's definitely not what they did! One of the reasons it came out in May is because it was delayed due to a brief gap in the masters of one episode. They hunted down an alternative source and were able to splice in the missing footage to ensure the final product wasn't missing any of the show.
I can't remember if this is a story I've told here or if it's just one of those you-had-to-know-LOAF bits. Anyway: yes, that happened. When NBC/Universal went to their archives they found that for whatever reason several seconds of footage were missing from every copy of On Both Your Houses. This turned out to be, for whatever reason, two or three shots of Archer from the final battle at the end of the episode. For whatever reason someone had snipped the camera facing Archer as she flew her fighter from the masters.
But they're on the DVD! You can actually notice how the quality jumps down for those couple seconds when you watch. What happened is that LeHah and I tracked down the show's original producer and convinced him to share his own VHS masters, from which NBC/U clipped the footage and reconstructed the episode.