I actually think it would work quite well. It could be nice to see how Angel and Spike deal with each other, both vampires with souls who have differing ideas as to whether or not they need to own up to their past.
This will also give Spike a chance to get away from Buffy, which in my opinion would be good thing. I used to really like Spike in season 2 of BtVS, then he got progressively suckier. He is currently in Buffy's shadow and is forced to remain there. On Angel the guy might get a good break. Gunn and Wes have been shown to hold there own, Angel's show seems to put less priority on making the lead character seem so much more powerful than the rest of the cast (look what happened with Willow, she started getting powerful and could only surpass Buffy by going evil... and now she is barely allowed to use magic at all). I'm kind of hoping it will give him a chance to become a little more of the Big Bad that he used to be, and that I used to like. These days Spike just seems even more whipped than he was with Dru.
Also of note is the fact that I generally like the majority of the Angel cast (excluding maybe Conner, though the last episode made me appreciate him more, he seemed like less of a moronic dupe and more of a person with his own ideas and wants). It seems to me that as characters move from Buffy to Angel that they become more likeable somehow. I used to hate Angel on Buffy, now I actually like the guy. Hated Cordy (though she was one of those 'love to hate her' characters) on BtVS, when she moved to Angel I started to like her (though the Angel relationship started to lessen that and I have certainly not liked her of late, though since she was possessed I might be willing to forgive and forget.... especially if she goes back to her old hair style). Wes was an annoying coward on Buffy, now that he's on Angel he's become a bit of a badarse and one of my favorite characters. Here's hoping the trend continues with Spike.
Personally though, I'd prefer Faith. After the most recent episode of Buffy I certainly think the character NEEDS to live on (I'd prefer on her own show, but on Angel would be acceptable). Though this probably isn't going to happen. If there is a God maybe she'll do some guest appearences in the future.