Okay, so before we get the actual plot and things happening to people we've gotten to know, we get a long rant from the author. Mainly, these are his complaints:
(1) It's really hard to write about ordinary, average, non-exciting people and make them seem interesting.
(2) In real life, people who are totally average have a lot of trouble accepting this fact.
(3) Some of them just kind of take it on faith that they are super-awesome, and this makes them happy. Varya is like this, and she just spends her days doing what she needs to do, and so is a relatively sane and balanced person.
(4) But others, like Ganya, really can't face up to the idea that they are average, and think that they are way smarter than the average bear, but because they are constantly seeing evidence to the contrary, they are way unhappy.
So this, in a nutshell, is what makes Ganya tick. He's too ordinary to be extraordinary, but smart enough to know and despair about this.
Anyway, enough chit-chat.
We start with a conversation between Ganya and his sister Varya, where we learn a bunch of new info:
(1) Aglaya and Myshkin are engaged to be married, and it's supposed to be publicly announced any day now.
(2) Varya has been working all along to try to get Ganya and Aglaya back together, but her efforts seem derailed by this other engagement.
(3) Ippolit is now living with the Ivolgins.
(4) Despite everyone's best efforts to keep it on the down-low, the whole General Ivolgin stealing 400 roubles situation is pretty widely known to everyone.
(5) The money was apparently for Ippolit's mom, who is General Ivolgin's mistress (we assume) which is how Ippolit finds out about the theft, and how he tells everyone else about it.
(6) Ippolit is now also in love with Aglaya, and has been writing her love letters (and maybe some anonymous letters to her mom, telling her that Ganya is just out for the money and status this marriage would bring, and maybe even about General Ivolgin).
And then, just like that, Ptitsyn, General Ivogin, and Mrs. Ivolgin run into the room.