This ep, a chance encounter ends with David staying under the roof of a little person named Buster. (I still don't get why people with dwarfism prefer the term little people over midgets. If I had that condition, I sure wouldn't like being compared to one-inch-tall creatures from Irish folklore.) Buster is something of a compulsive liar, and boasts to his acquaintances that David is fencing money for him from a well-publicized heist. This gets them in trouble with the crooks who pulled the heist, since the money is now missing.
The gangsters plot is boringly routine, but "Half Nelson" shines with its handling of dwarfism. The key scene is when Buster brings David along to a party, only to find David is the only person there over four feet tall. Buster has a bit of a row with the hostess over this, and his contention that people shouldn't limit their friends to people of the same height seems just. But the hostess points out to David that things are different for little people, like it or not. "Half Nelson"'s honest and complex look at the struggles faced by little people makes it all the more unacceptable that shows like the Simpsons (in the episode "Eeny Teeny Maya Moe") took such a shallow handling of the issue more than 25 years after this aired.
The episode isn't trying to set people with dwarfism as a race apart, either. Buster is as well-characterized as an individual as he is as a little person, and as David points out near the end, the inner demons he faces are just variations of ones that all humans face.
To top it off, there's a terrific encounter between Banner and McGee in which David amusingly tries to pass himself off as one of Buster's fellow wrestlers. "Half Nelson" mostly fails on the action/drama front, but undeniably succeeds on the human front.