Wannabe Slayer
I think Spike giving the soul to Drusilla is an amazing shows just how far he has come; he is willing to give up that for which he fought so hard to obtain so she can have the same chance at redemption that he and Angel have had. I am concerned for the state of Drusilla's already fractured mind, but I'm anxious to see how this plays out.
However, I don't think it was HIS soul that entered her, just as I don't think the Demon put John's soul in Spike's body. I think mystically the demon played on the universe's laws of balance and of cause and effect. In restoring Spike's soul, he removed the soul from another, not transferring it between the two. If Spike had've gone to the Romani clan with the same goal in mind, cause-and-effect would have remained in the form of the "perfect happiness" clause. If we've learned anything at all from Buffy and Angel, it is that there are consequences for everything, especially magick (Season 8 is superb example of such consequences, as the universe tries to restore the balance displaced by the empowerment spell from "Chosen").
The consequences of the Romani spell were "good" compared to those of the demon's restoration. Enyos explains these perfectly is Season 2's "Innocence": "[He] is meant to suffer, not to live as human. One moment of true happiness, of contentment, one moment where the soul that we restored no longer plagues his thoughts, and that soul is taken from him." Willow tells us in "Orpheus" that the Romani spell pulls the soul safely and directly from the ether, harming none in the process. The consequential ripples of this spell, which could be a "purer" form of restoration even though originally cast in vengeance, would impact few beyond Spike's inner circle.
The consequences of the Demon's actions, however, are unknown at the time of Spike's restoration in "Grave", because we as viewers/readers had yet to see a soul restored in this fashion. We can assume Spike's soul was pulled from the ether, the mystical holding place for the souls of humans-turned-vampire (since we know Buffy's soul went to "heaven" when her body died and nothing took possession of it to turn in "undead" in "The Gift", we can assume that a vampire's soul in the ether will not move on to heaven or hell until its undead body "dies", or turns to dust). The Demon maintains the law of balance for this mystical action by taking the soul from another to place in the ether in Spike's stead. The Demon's methods are even more sinister in that it takes the soul from a psychopathic murderer who eventually will stop at nothing to get it back, the consequences of which we are seeing now. Again, the Law of Balance and the Law of Cause-and-Effect are in play.
When John's spell removed the soul from Spike, I don't think it was Spike's soul itself we saw floating among our characters. It was something more akin to a Thesulan Orb, acting as a gateway between our world and the ether, a conduit through which not only Spike's soul but any soul could travel. Therefore, when Spike sent this glowing ball into Drusilla, it was her soul that passed through it into her body, not Spike's soul.
As for Fred and Illyria, the debate of restoring Fred's soul has gone on since "Shells" first aired; however, the episode explicit states that this cannot happen. As the Doctor says, "There's nothing left to bring back. Miss Burkle's soul was consumed by the fires of resurrection. Everything she was is gone. Forever." Unlike the circumstances surrounding vampirism and siring, Fred's soul wasn't lost to the ether; Illyria ate Fred's soul in the process of taking over her body. Illyria's recent embrace of her "humanity" is what AndrewCrossett refers to as the lingering memories and identity of the person and body. But I don't agree that a person's soul doesn't share these same memories and personality, because most mystical beliefs teach that each soul is unique. This uniqueness is how we know John's soul did not end up in Spike's body, nor Spike's soul in Drusilla's in turn.
A soul can, however, share itself with another, as we learned in "Lullaby", and therefore, must have its own capacity for the love, altruism, and empathy that Crossett mentions in regards to Darla. Darla's feelings during her moment on the rooftop with Angel don't parallel those of her human self before the Master sired her. *Before she was turned, she was an uncaring whore dying of syphilis. She only experiences these new feelings as she shares the soul attached to Conner's body which is growing inside her. Souls can only be shared through this unique physical bond between mother and child, and so cannot be shared between father and child, or any other two people for that matter, as that bond does not exist.
As for Willow's presence that white avenger is confused by, remember that this segment of the Angel-verse still takes place in the time before or during the very beginning of Season 8. Remember in the first two issues of "The Long Way Home", Willow is absent. Buffy and Xander aren't sure where she is, Kennedy won't tell them, and Dawn keeps asking when she is coming back. During this Spike arc, he keeps telling Willow "not to involve HER", "don't mention this to HER". Willow actually respects Spike's wishes until the final pages of "Twilight" when Spike's ship crashes into the building, and Willow says, "Oh, this is gonna be good."
Continuity wise, I would place Spike 5-8 after the Angel 44, because both characters still have to be gone from our dimension for a while, and we know from "The Last Gleaming" that Angel reappeared on Earth before Spike so we can assume he'll be leaving this plain before Spike does as well.
Also, I do agree with white avenger that Willow is a whole lot friendlier toward Spike than she ever was in Seasons 2-7, but I'm willing to forgive this. Afterall, he did save them all from the First and its army of Turok-Han; I'd be friendly to him too. 🙂