This is not a mystery story. The title implies betrayal, but there is never any attempt to hide the traitor's identity. If you don't know already, I'll go ahead and tell you.
The traitor is Nightwing.
Just kidding. The Titans are betrayed by Terra, of course. If you can't tell this from looking at the cover, you could always read the foreword by Marv Wolfman, or the introduction by George Perez. Or, you could read up to page 9, where Terra herself tells us, or page 11, where Deathstroke confirms it. So yeah, Terra's a traitor. The setup here is that everyone knows BUT the Titans.
She has worked with them for a few months, training with them, gaining their trust. This despite the fact that she obviously doesn't seem to like any of them, and that Raven is constantly reminding the rest of the gang that Terra is dag-nasty evil. They overlook her rough edges, because they think she wants to be a hero, and that's what the Titans are going to turn her into.
The first half of the book is solely about the majority of the Titans (minus Raven, of course) being completely unaware of Terra's true allegiance, despite all the clues being laid out before them. According to Wolfman's intro, the Titans reflect the fans at the time - no one believed that she was really evil, despite it being constantly thrown in their faces. And I can see that - in a superhero book, one never wants to believe that the characters are truly evil. Even the bad guys that get the most screen time are given redeeming aspects, as Deathstroke is throughout this volume. No one wants to believe the worst of Terra, but that's exactly what we're being asked to do, which is why this book is so counter-intuitively brilliant.
Eventually, Terra's betrayal is revealed to Dick and the rest of the Titans, none of whom are willing to accept it at first. Gar even shows blinding stupidity on this point, trying to reason with her in the final battle, despite the fact that not only is she trying to kill him, but that she completely disregards him, not only as a threat, but as a person.
Terra eventually self-destructs. The book claims she goes completely insane (and kills herself with her own powers), but I see it a different way. I don't think she 'went insane'. I do, however, think that her arrogance overtook her ' the gift of such amazing power was one she couldn't handle, and her less-than-Einsteinian intellect couldn't cope with it. She was simply going to wipe her hands of the entire affair, kill the Titans, kill Deathstroke, kill all the H.I.V.E. members, bury them under a mountain, and be on her way. She just never realized that she had no immunity to her own powers, and that if she whipped up a rock storm, she would be as subject to it as everyone else. She got carried away because she wasn't smart enough to get out of the way of her own powers.
This leads us to the strange conclusion of the book - rather than tell the superhero community what happened, they hold a hero's funeral for Terra. They tell her brother that she died a hero, and they create a memorial for her. I call this strange because while it's nice, it doesn't seem like a very responsible thing to do. Terra could have been held up as an example to all the meta-humans of what happens when they let the 'meta' come before the 'human'. She could have served a valuable purpose as a reminder to all; but instead, she becomes the Titans' biggest failure. Perhaps they feel guilty, perhaps they weren't listening during her evil speeches, but I just don't understand why the Titans would react like this.
But this book's not just about Terra. It includes not only the introduction of Jericho, but the first appearance of Dick Grayson as Nightwing, as well as the complete origin of Deathstroke the Terminator!
Equal time is spent on Dick Grayson's story and Slade Wilson's. To some extent, the juxtaposition of the two stories serves to compare the two characters, both of whom came to a crossroads where they just couldn't continue without drastically changing.
For Slade, his conversion into Deathstroke came when the Army refused to authorize a mission to save his friend Wintergreen. He took it upon himself to do the job, and as a result, was kicked out the military. Having nothing else to do, he became the Terminator in order to complete himself.
Dick Grayson, on the other hand, has come to a crossroads of his own design. He knows that he cant fulfill both of the obligations in his life. He can't be Robin, partner of Batman, and Robin, leader of the Teen Titans, at the same time. So he decides to give up the Robin identity, so that Batman can reclaim it, to use it again with another partner. Dick decides that his place is with the Titans, but once that decision is made, he is at a loss of what to do next.
In order to be true to himself, Wilson created an identity; to do the same, Grayson gave his up. The only problem is that this leaves Dick Grayson without a secret identity - he can't go into battle wearing a leather jacket (remember, this is twenty years before Grant Morrison's X-Men). So when it comes down to it, he adopts an identity that pays homage not only to Batman, but to his parents and his other mentor Superman, and becomes Nightwing. This is expanded on, of course, in the recent Nightwing: Year One storyline (but of course, here we're Pre-Crisis, there we're Post-Crisis, so there are a number of idiosyncratic contradictions which we have to pretend we don't notice).
This collected edition is a great read for a number of reasons: the saga of Terra's betrayal, the origin of Deathstroke, and the coming-of-age of Dick Grayson not being all. It is easy to jump into, even if you're not familiar with New Teen Titans Pre-Crisis continuity; I'm reasonably sure that this story has indeed been referenced and included almost wholesale into Post-Crisis DC, so pretty much everything that happened here stuck.
It's a great story at a great price, by one of my favorite authors and my favorite artist. This is nigh as good as a comic can get.