I have to admit that this is one of the very few episodes that I've watched time and time again.
The very, very first time I saw this episode I sat in stunned silence for a long while afterward thinking about everything I'd just witnessed.
Things didn't make sense then and still don't - somethings make sense now after reading the other posts in this thread.
I was aware that Buffy was supposed to have extra-ordinary healing abilities prior to Normal Again, but if you actually look at each episode in regard to the injuries that are sustained then everyone has the healing ability -- this would say to me that BtVS as a whole is a fabrication made in Buffy's mind because injuries, even to those other than the Slayer, heal fast.
For example - the cut Buffy receives on her brow that needed butterfly stitches. The wound is seen several times in the episode and the scar and the wound are gone after only a few hours. The same is true of other characters, Principle Wood for example, after Spike gives him a beating in the sanctuary at the end of Lies - the next episode, which I'm presuming (I may be wrong, but given the story timeline even if a few days had passed, none of the wounds would have healed that much) was the following morning.
The timeline in BtVS is scanty at best - we know that periods as long as a year pass (Xander and Anya's wedding is referenced) without much incident (or at least anything major to the story happening) this again leads me to think that Buffy is indeed in the sanatorium.
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Whilst she's hiding under stairs watching the Demon have at her friends, Buffy is impassive, she's just not interested in their plight and, as previously discussed in this and other threads about this episode, one way or another a choice is made and Buffy does what she does best.
Is it her loyalty to her friends, be they delusions made up in her mind or actual people in the real world that makes her choose to continue the good fight against the Bad or, is it that in a sanatorium somewhere a young girl looses the battle for her sanity and falls head-long into an almost catatonic state, thus maintaining and reinforcing the illusion - an illusion that cannot exist without the 'friends'.
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At the end of the final episode, the survivors are wondering what to do next - a reasonable thing to do given the circumstances, but what would a once unique girl do in the future now that there are others like her in the world? If, as I'm leaning toward, Buffy is indeed in a sanatorium now that she and the gang have survived the last Big Bad and are now apparently free to do what they will - would she recover and return to the 'real' world or is she too far gone? Now that there's nothing to keep her in Sunnydale (apart from the fact that it no longer exists) why keep up the fantasy?
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I suppose Joss had Season 8 and beyond planned and possibly already written at the end of Season 7 but S.M.G. (Sarah Michelle Gellar) decided she'd had enough of Buffy and wanted out to pursue other projects - a choice that I disagree with, but have to respect.
I agree with what James Marsters said - I think there were at least another two seasons worth of Buffy stories to be told before the writers would have ran dry, but after seven years playing the same character at twenty-two episodes per season, I think S.M.G. had had more than enough.
Of course, I want more Buffy - I would simply love the series to make a long awaited comeback and I'm certain in my mind that if the scripts, story arcs and the hunger to do it was there in S.M.G. and the everyone else involved in the original that it could be done - we can only hope eh?
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So, my current way of thinking is that Buffy is indeed in a sanatorium living the life of the Slayer, battling away against everything evil as we know it - and the demons in her own head -- she's adding layers to the illusion all the time and it all seems so believable to her, and to some extent us. We are embroiled in the fantasy as though it was indeed real-life.
Normal Again is thought provoking for me time and time again and the more I think about it, the more I'm convinced that Buffy is in the sanatorium - and makes me think about myself - am I in one too - is my life, boring, empty and unfulfilled as it is one huge delusion? Am I really sitting at my PC writing this or am I a bumbling mess some place?
Heavy, heavy stuff... and Joss planted the seed in all of our heads knowing that this particular episode would provoke all of these thoughts - he knew he'd piss off so many people in so many different ways and that's why, when all is said and done, he's a master story-teller.
