I think that it would have been fun if Tabula Rasa was based off their secret desires/ fears/ thoughts. 😀
I think it does it some extent, wishingoceans. Upon waking, Xander is immediately attracted to Willow.
Buffy naming herself 'Joan' is a ironic comparison to Joan of Arc of course (another young girl who was "chosen" to fight) but it's also a hint at the desire Buffy has to be a more "normal" girl. As Dawn points out in regard to her name choice, "I mean it's so 'blah.' Joan?"
I once read this great article on Slayage that talks about the importance and symbolism behind names in Buffy...I'll see if I can find it. The author makes some great points about Buffy choosing to name herself Joan.
And of course, upon realizing Spike was a vampire ("Check the lumpies") he assumes, since he has no desire to bite anyone there, that he must be a "vampire with soul" - which is just classic funny. (an ironic spin on his eventual destiny, but also a funny joke regarding Angel's mission of course).
The episode explores the character's not as they are, but as they could be. What's so great about it is that even though they don't have memories, they still retain certain elements of their personalities. For instance, Anya still loves money and fears bunnies.
Tabula Rasa is Latin for 'blank slate.'
Fun trivia fact: The brown tweed suit that Spike wears in this episode is the same one used in "Restless" for Xander's dream. Giles and Spike assuming they are father and son also echoes Giles's remark that "Spike is like a son to [him]" in the same episode. (Gile's worst nightmare!)
Normally, I wouldn't say this, but check out the Wiki page for this episode. It's filled with interesting tidbits.
And of course, I don't think this episode is overrated. It is my number-one favorite episode, ever of the series. I think its genius.