I loved this episode too, but even now I sit at home and wonder, Is sunnydale real?
If they had ended the episode differently then I probably wouldn't think this, but as it ended back inside the instituition with Buffy staring into space and the Doctor saying, 'I'm sorry we've lost her!' It just made me wonder.
I really thought that this was a brilliant episode though! Everything in both worlds seemed so self explanatory, for example you really can imagine Sunnydale been a part of Buffys imagination, because Come on Vampires! Really!
But then you can understand also that the Demon made this happen, you sort of get torn in two, between our reality and the reality of Buffy as we know it.