This fight between Danzo and Sasuke happens in Naruto Shippuden Episode 209: Danzo's Right Arm. More information about Itachi comes out in this episode as well.
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Yes he is evil, well he seems to be evil. He wants to help Konoha, but he has it all wrong, he does things the 'evil' way, for example he wants the jinchuuriki of the Nine-tails (Naruto) to stay alive, i.e. keeping him away from Pain, so he kills the cute little messager frog that was going to Myobokuzan (frog city) to fitch Naruto. And he didn't help Konoha when it was under attack because he believed it would be repaired afterwords. He is an complex man.
that episode does not exist
episode 203
Well I'd say Naruto is stronger than Danzo because in manga 499 he learns how to control the kyubi. With that being said, if someone were to be able to control the demon fox back when minato (4th Hokage) was fighting him, minato would not have defeated the fox
episode 115