With the chip and under the First's control, Spike was able to kill, so Giles's concern isn't based on facts. And Buffy said something very important since the war is against the ultimate Evil: "You can't beat evil by doing evil."
True, and if Buffy had chosen to replace the chip, then it would no longer be the Initiative's fault, but her own doing. Spike would have accepted that - he knows he's dangerous - but for Buffy, it would surely have felt like a terrible betrayal of him, especially after she said, "I believe in you." So there really was no choice, despite what she says.
Anyway, Giles should realize it's too late to argue now about the chip. And Spike having a chip is separate from whether Buffy relies on him, which she has done more or less for four seasons now.
Vampmogs above outlined several plot holes. It's hardly major, but notice how Spike has brain surgery several times in the show without ever losing a bleached hair off his head? Even a vampire would take a day or so to heal from that, I'd think.
Plus there is the ripped shirt and blood on Spikes shoulder when he leaves the house to go look for Buffy, ( how does he get that??) though I have no idea if that means anything or if I'm just goin to the nth degree
I thought that, too, but zoomed on the DVD, and it actually some kind of design on the shirt, maybe a broken heart? Or possibly an orange with ivy.
"Bidet of evil" - is it too late to change my username?
My nitpicky thing is that I think Robin's timeline is off. He says he was four when his mother died, which was in 1977, thus he was born in 1973. This is 2003, so he would be 30, but he talks of his "avenging son phase in my 20s" as if that wasn't just last year.
Once again, Spike calls Xander "the boy," though he uses his name to Buffy. It's another little thing, but it just seems weird to me, especially after he's roomed with "the boy." I feel there's some sub-text I'm missing.
I love Anya's expression as Giles complains about all the dating. And "Children, enough!" I feel like this is Giles releasing seven years of frustration right here.
Not a bad episode, though I agree with a lot of the complaints above about plot holes and such.