In this episode we talk about minute 51 of The NeverEnding Story:

Brilliance abounds as Thomas, Tierney and Donnie talk about the observatory set and the telescope (which definitely doesn't work but we still all want one).

Engywook totally admits that he's just using Atreyu for his research but also gives us some great exposition about how this is only the first gate--which you could probaby get around pretty easily if the whole point of the quest weren't obviously to go through.