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If not ruined, I would say that it significantly limited it, in the fact that Sarah has been identified with the character of Buffy to the point that it has been very hard for her to get acting roles. She's not the only one that this has happened to, obviously. It took William Shatner many years after "Star Trek" ended to ever get another successful role as "T J Hooker," and then he went right back to Captain Kirk in a series of movies. Richard Boone was always identified with Paladin, James Arness was always Marshall Dillon, and the immortal John Wayne was always the same basic character, whether he was a cowboy, a soldier, a sailor, or a Mongol warlord. Fess Parker's only successful role was Davy Crockett, so he basically cloned that character and renamed him Daniel Boone.
Typecasting isn't necessarily a bad thing for an actor, as long as the type is popular, though it does limit their ability to get roles out of type. Where the problem comes, is when the actor isn't satisfied with making a career out of playing what is, essentially, always the same character, just with different names. Sarah, obviously, wanted to be a diverse actor, capable of being considered for a variety of roles, and she never was able to do that. She has a vert loyal fan base, but her fans are only a finite number. The general audience hasn't "discovered" her, and, at this point, they probably never will.
What @Blaze said. Haha! Buffy is a generation defining television show, I think that the cast can literally quit acting right now and their resumes will still be worth gold. Plus, these people have a life outside of acting, and that includes venturing into new territory, career wise. As far as SMG, while she never got a role as iconic as Buffy (because let's face it, what are the chances of actually landing a role as iconic as Buffy), her career hasn't really been "ruined". Look at her Food Stirs company that seems to be thriving. So I wouldn't say she's doing badly at all, she just switched lanes. Nothing wrong with that at all.
Actors don't really get a lot of shots in their career, so, just having one great television run is really, the best you can hope for. A DB career where a century can be measured by what you show you are the male lead on just doesn't happen that often. Having said that, Nicholas Brendon, but he has deeper issues.