I thought Scott was busted. I didn't think of a way he could get out of it but I knew there had to be a way. It would be pointless to have the core of the plot (Scott being a werewolf/helping a fellow werewolf) getting discovered so early in the series.
Allison pulling out the condom was priceless. Allison probably would've have bailed him out sooner but she was just as embarrassed as Scott was nervous.