This isn't going to be easy for me to explain.
Max, Steve, it's been a long time since you last submitted something here. That and it took a lot of balls to upload something that's three to four years old. However, judging by this (2007) and the latest Kazahana episode (2010), you two haven't improved at all.
Graphics: Just like Chester Kwan of Totally BS fame, along with Legendary Frog, Rhete, and Image Nation; this has no notable visual improvement, even by 2007 standards. There's not much in terms of character animation aside from tweened gestures, blinking, and lip sync. However, I really like how you used gradients for those columns. I suggest you guys get some books on basic drawing/animation/direction techniques so when you guys return to this, the results would look much better. Look, I believe that not everything needs the best graphics, but enough to get the point across. On the other hand, I can't stand it when people make no real improvement.
Audio: You guys did a great job on the music and sound effects, while the voice acting leaves a lot to be desired. They didn't have much in terms of emotion or distinction although it was bearable. Another issue with the voices are that they didn't sync up with the mouth movements, and one voice had hissing going on.
Content: This is what pretty much saves this from getting a much lower score. I haven't seen the previous episodes to this, but your story is really interesting. It kept me watching all the way through, and the direction/pace were decent most of the time. Kudos for including quality toggle buttons, which is something that more people should consider.
The Good:
-Interesting plot and characters
-Original
-Good pace
-Fitting music
The Bad:
-Even by '07 standards, this looks outdated and boring to look at.
-The voices were sub-par and poorly synchronized.
-Could have used better colors, and the shading at times looked sloppy.
Overall: I think another seven from me would be fitting for this. However, I still like Xin and your live action short film.