Many people have noticed that in the opening sequence of the Fringe episode Jacksonville, the city of Manhattan is misspelled "Manhatan". Could this really be just a typo? Not a chance. This was the first hint that the opening scene started out in the alternate universe!
There are other odd things that could have been a tip-off: the strange reaction to seeing coffee (perhaps due to the "blight" mentioned in Grey Matters), and the blueprints for a "new" Pentagon.
Ted Pratchet can be seen wearing a wedding ring though out the scene, and we learn later that our Ted Pratchet was never married. And just for fun, there was even a photo of the Twin Towers on the wall of the office.
So what exactly happened? It was the reverse of Walter's car experiment. Thomas Newton's experiment transported the Dodst & Rathje building from "Manhatan" in the alternate universe, which collided with the Manhattan building in our universe. At the end of the episode, the universe compensated by taking the Brayson Place Hotel.