I don't care for this episode for two main reasons:

1) The ending doesn't prove anything because Grace could say she was in the bathroom (a touch of stomach flu.) Or, her attorney could claim such a thing. Or maybe she just fell asleep and the film broke. There are probably more possibilites than Columbo's ideas.

2.) If Grace forgot the murder, there is no enjoyable Cat and Mouse game. Grace believes she's innocent and really does feel unjustifiably persecuted by Columbo.

John, your first point is well taken...that is a strong possibility. Her lawyers could have claimed that she was visiting the little girl's room when the film broke and then she came back and spliced the film. But somehow I think she may have asked Raymond to do that for her, since she had had such a long evening.
On your second point I just have to say that on one's initial viewing of this episode, the viewer is unaware of Grace's condition. We are not privvy to the fact that she has this brain malfunction which makes her forget the recent past...so we do still see a cat & mouse pursuit...that is, until the ending, and we realize that this woman remembers nothing of the murder. Yes there are signs.....not remembering Columbo's name...her perplexed look when Columbo visits her at the dance studio and is questioning her...just look at her face...she almost seems like she doesn't even realize her husband is dead, let alone that she killed him...but I think most people notice these things after repeated viewings, not on the first one.

Cassa, you're absolutely correct. There most definitely is a "cat and mouse" pursuit upon one's initial viewing of the episode. Leigh plays the part so incredibly perfect that you do "see" Grace as a plotting murderess all along during the first viewing of the episode. Then, once you realize that she has the disease and watch the episode again, you "see" Grace in a totally different aspect - even though it's still the exact same performance. Again, this is because Janet Leigh was such a fantastic actress.

She was wonderful, wasn't she? I agree Headache that she played this role with absolute perfection. If you just watch her face during the whole episode, the little nuances you see reveal so much about her character.
I love in the beginning when she is whirling around Henry's bedroom. She is absolutely giddy with delight. She floats around the room with such an air of sheer bliss.