That was really compelling stuff at the time. I think Shandling seemed to be enjoying toying with Gervais for the benefit of the cameras, but didn't particularly like him either. His little "I did my best" interaction with one of the producers/cameramen right the end is indicative I think. Gervais' inability to defend his style of comedy with any level of articulacy was a bit pathetic too.
Awkward, but ten times better than the other ones in that series where Gervais obsequiously cosied up to various comedy legends and tried to put his own work in the same bracket as theirs. He's terrible for that. I think he went around comparing Ghost Town to The Apartment when it came out. Unless he was just being ironic of course. *yawn*
Interestingly, while the other episodes in the series were on at prime times, this got completely buried in the schedules late one night over Christmas.