Most of the bands which appear on Buffy have been real. Usually, the only time they are fake bands are when they fit into the storyline, eg. Oz's band 'Dingoe's Ate my Baby' and Veruca's band 'Shy'. However, the sons which both 'Dingoes Ate my Baby' and 'Shy' play are from real bands.
The band who provides the music for 'Dingoe's Ate my Baby' is called 'Four Star Mary'. And the band who provided the music for 'Shy' is called 'THC'.
If you want a bigger list of every band to appear on Buffy, check out http://www.buffymusic.net . It has almost every single band to have ever appeared on Buffy, what song they sang, and the episode they appeared in.
Hope that helps.