The following is my understanding of sacramental issues, and I'd appreciate anyone else's thoughts - in fact, I'd very much appreciate anyone's input, and advice on finding sources dealing extensively with this subject.
My understanding is that the "form" of a Holy Mystery (for example, Baptism, with three immersions, the proper prayer by the Priest, etc.) can exist outside of the Church, and this form (so to speak) is "valid" if done in a manner acceptable to the Church of Christ.
When a convert from a heterodoxy body is received into the Orthodox Church, the option is there (depending on that particular Church's rules on the matter) to receive them as one would receive a pagan (Baptism, Chrismation, and the complete cycle of initiatory rites), or to receive them via "economy" (with the understanding that the "form" of baptism they received in their previous religion was acceptable.)
If the reception is done via "economy", the previously empty form is "energized" by the Grace of the Holy Spirit, which only the Church of Christ has as Her guarantee and Life, and as such is made "authentic." This is not a retroactive validation of Baptism (which would seem to me, to be logically incoherant), but the bestowing of Life to that which was previously only "potential", due to it's material validity (but unable to confer Life due to the fact it was not bestowed by the Church of Christ.)
While one could speculate that it is possible for God to bestow Grace where He see's fit (hypothetically beyond the known boundaries of the Church), the Church can have no genuine knowledge of such a happening - thus the only legitimate course of action has always been to assume that these heterodox baptisms are only empty vessels/conduits, which only become a means to Life upon entering the Orthodox Church.
IOW, in the case of "economic" reception of converts (from schisms and heretical sects), it is as if there was a delay between the imposition of the outward/material elements of Baptism, and the infusion of God's Grace and spiritual rebirth (?).
OTOH, if there is reason to believe that the form of "baptism" imposed upon the convert in his former religion was not acceptable, OR if there is some circumstances requiring that a clear line be drawn between Orthodoxy and heresy (say, the heretic's of the converts past are aggressively prostyletizing amongst the Orthodox faithful, or as is the case in our modern circumstances, there is an ecclessiological heresy spreading which confuses the Orthodox Church with heterodox religions), then the convert will be received in the same manner a pagan would be. No injustice is done by insisting on such a reception, since all that is being repeated is an outward form, which, without vivifying Grace, is worth little - according to St.Peter, Baptism is not simply an outward bath for the flesh, but is significant due to it's spiritual content.
Is there anything in my understanding which is in need of correction?
Seraphim