Unlike you, I haven't seen Private life of SH yet so to me, "gotcha!" took me by surprise. I mean, I know Sherlock is a scientist but for him to be *that* cold... I couldn't have been more shocked if he had actually punched Irene in the face. What I really enjoyed this episode was that the cold mask came down a bit and how he's completely in his element when solving puzzles and like a fish out of the water in normal social situations, such as the Christmas party.

However, I think Irene was really only turned on by Sherlock's mind. I think she did all that flirting to get a reaction out of him and see how he would respond. He obviously did excite her, but, once again, it was in terms of the game they were playing.
I'm with you on this - I thought that, like Sherlock, she likes a challenge. And now I have to find it somewhere, preferably with subtitles. :)