According to the "Wolves At The Gate" arc on Season 8, his special powers were the result of a spell (Spike referred to it, I believe, as, "Smoke, mirrors, and Gypsy magic") which was totally independent of any powers or limitations typical to normal vampires. The spell gave him the power of transmutation, the ability to control the minds of men (and probably animals, though that was never mentioned in that arc) a limited degree of immunity to the effects of sunlight , and virtual invulnerability to the traditional methods of killing vampires, or at least from being staked. Whether decapitation or incineration would work any better was never mentioned in the "Buffy" episode, unless her statement, "You ALWAYS come back," would apply there.