for what i've read it's between the first and second season if i'm not mistaken. GP007 i have to give it to you the second season of code geass for me was a little of an underachievement, but the first one, was really really good.
I agree, the first season showed promise and was going in a good direction but then they decided to split it up and let us wait months, something the shows director didn't even want to do but he couldn't fight what the studio wanted. After the fact he called it a terrible move and that the decision ruined what he had original planned to do with the 2nd half of the story. From what I remember being talked about back then the 2nd half was probably going to be pretty different from what we actually ended up with. Now we'll never really know, whatever the case may be I've moved on from this. I'd just as much see them bring out another new show then try to milk CG a bit more.