On the walls of Bert Cooper's Japanese themed office hangs a copy of "The Dream of the Fisherman's Wife", a piece by Hokusai from 1814. This picture is often erroneously believed to have inspired Japanese tentacle erotica (it is in fact a result of Japan's policy of censoring genitalia in all forms of pornography).
At one point, Don Draper suggests Israel would be better off if they 'stopped blowing up hotels'. The hotel to which he is referring is the King David Hotel in Jerusalem, which was bombed by Israeli freedom fighters in 1946 killing dozens of people. At the time the hotel housed the British administrative headquarters in Palestine.
The colored comic strip on the front page of the Sunday newspaper that Don Draper picks up from the table is Peanuts by Charles M. Schulz. It was not uncommon during 1960 for the Sunday funnies to be printed in color and posted to the front page of the newspaper (to boost sales at newsstands). The most popular strip at that time was Peanuts.
After Don describes Israel as "utopia," Rachel tells Don that she learned at Barnard that "the Greeks" had two words for it (one meaning "a good place" and one meaning "the place that cannot be"). In fact, the word "utopia" was coined by Sir Thomas More in 1516, using Ancient Greek elements for a book written in Latin. The script is referring to possible homophones derived from Ancient Greek elements ("eu" + "topos" and "ou" + "topos," respectively) but not actual Ancient Greek words.
The toy on the stairs that Don slips on is a Wheel-O, or Magnet Space Wheel, which first appeared in 1953 and has since remained popular. The wheel has a magnetic axle that keeps it rolling on a curved rail in an "endless loop".
David Carbonara: The composer for Mad Men plays with the band in the bohemian hangout that Midge takes Don to at the end of the episode. He can be seen back and to the right of the singer (from the viewer's perspective). Note: The song is entitled "Babylon", like the episode title.