I wouldn't think she was insane. I love this episode (where my username comes from BTW), but I hate the way her friends treat her because I mean, Buffy wasn't really acting insane. It's normal to hate your roommate and to be completely annoyed by them, and yes she thought she was a demon... But she was right, wasn't she? I think they got too out of hand when they tied her up and thought she was possessed. I always thought that was very over-dramatic.