One of the ankheg opened up with a critical hit on camstone's ranger Jaer, forcing him to disengage and fight at range. jamesbarrett's fighter Dragor waded in and started soaking up damage from the ankheg, but with Jaer and the NPC monk Verdhaven assisting, finally managed to bring it down. Dragor then moved on to the bulette -- which was a much tougher opponent. Unfortunately, at this point Dragor was in the "running on fumes" level of hit points. The bulette had begun its part of the fight by instantly killing one of the party's horses, but Dragor got its attention and so it turned to face him and started chewing him up something awful, leaving the dead horse where it lay on the ground behind him.
At this stage (while laurie_robey's fighter/rogue Angelina looked after the merchant's daughter and pholph's bard Ulf looked after the baby), jamesbarrett's wizard Kyriela set of a fireball behind the bulette, doing a lot of damage.
Now, the bulette is an appallingly stupid monster. Think "ravenous bugblatter beast of Traal" stupid. So, when it suddenly got horribly burned from behind, I decided to have it make an Int check to figure out what happened. It rolled really well for a bulette -- getting a total of 9 (i.e., not even enough for a basic success). I therefore decided that the bulette spent the next round ferociously mangling the dead horse for having exploded at it. However, that was a critical turning point for two reasons: first, it was a round not spent ferociously mangling Dragor (who was one round of mangling from certain death), and also it was a round in which the rest of the party could keep pounding on the bulette.
In the end, they managed to kill one of the ankhegs and the bulette; the other ankheg retreated under ground carrying off a horse of its own. (As laurie_robey pointed out, it's a rough life for horses in D&D. My character in jamesbarrett's game had his horse swallowed whole by a behir once.)
The rest of the evening was spent dealing with the ramifications of their discoveries last time (including returning the daughter and her baby to the merchant and giving him dire but baffling warnings about evil cults), and finishing off their scam centering on the sword of Dorl Tavyani, which camstone has been nursing for months now. They got 3,500 gp and some bureaucratic palm-greasing out of it -- not bad considering the sword is actually only worth about 150 gp (and that mostly because it has continual flame cast on it and has a gilt handle). I'm glad to see they got some treasure out of all this, aside from their agreed fee from the merchant plus a slight bonus. The way they tend to leave the stuff lying around on the dungeon floor, I worry about what'll happen when they start needing DR-piercing weapons and the like.
Anyway, a fun time was had by all, some plot threads were resolved, and some others are just getting started. The game is going well!