Joan Collins as both the mother and the witch was a nice touch. Although FTT doesn't take the idea anywhere, it's definitely suggestive in the story concept: the threat to the children comes from an older female. And the step-mother's unexplained death at the end of the episode certainly parallels the witch's death. Since nothing is explicitly stated, my interpretation is that FTT decided to add an extra layer to the story, for those grown-ups who may be watching. I certainly don't remember catching on that the witch and the mother were the same actress when I watched it as a child.
This is one of the few episodes where FTT really goes above and beyond to make this ending happier than the original tale. Not only do Hansel and Gretel escape, and find their father at home, but all the children who the witch had previously eaten were restored from their gingerbread forms.
The complete collection is pretty reasonably priced at this point, just about $30 new.
You can also watch the episode on hulu.
In weird juxtaposition news, as I was watching this I was in the middle of rereading Little House on the Prairie. As the step-mother complained that if father didn't sell his wood, they wouldn't have any bread to eat, I couldn't help but think: "Start a garden, woman! What are you doing all day?" (Well, eating gingerbread children, perhaps.)