Let me introduce you to the Joss Whedon recipe:
1) Introduce us to a bunch of characters
2) Make us love them.
3) F*#k them up.
Over the season we've grown to care about Buffy, Willow and Xander, both as individuals and as a group. this season finale has little of the build up of later ones, but Whedon compensates by taking an axe to our favourite characters' feelings and relationships. We care about all three of our leads, but it's impossible for all three of them to get what they want. The scene where Xander asks Buffy out is heartbreaking, more so because we know how inevitable her answer is. But at the same time our feelings are dragged through the wringer for Willow, who is forced to watch it all and then be asked to be a pawn to make Buffy jealous.
And then of course Buffy herself is thrust into a situation which encapsulates one of the central conflicts of the first season: the choice between being The Slayer and being an ordinary teen. Buffy tries for a while to hang onto the notion that she has a choice, but of course there is no choice at all; like growing up, there is no way to unlearn once you've seen the world as it is. There's no way to close your eyes, to go back to the innocence you once enjoyed.
All of our central characters are given some nice moments, and there is real poignancy at several parts of the episode. We see Buffy moved by Willow's hurt, we see Xander's love overcoming his jealousy, we see Buffy accept her destiny with all the pain it entails. And the victory takes us back to the things we learned in episode one; that what makes Buffy more than any old slayer is the friendships she has formed. It means a lot more now that we've been through a year's worth of adventures, as we've seen the dynamic between the four central characters grow. It's the difference between knowing something and feeling it.
Anyway, it's a fitting end to the series. There wasn't much of an arc in this season compared to those to follow. The big bad is fairly simple, and there aren't a lot of character curveballs. The first season is really about the developing closeness between Buffy, Xander, Willow and Giles, and it's that dynamic which makes this episode work, and makes it a fitting finale.
I give it five dead Buffys.