First, the music is great. There is a variety of tunes and it is catchy. But just like all the best musicals it’s more than just that. The songs reveal what is going on in the characters minds and at times mean different things to different characters. And in the case of this episode it forces them to confront all of their problems. And that leads into the second reason it’s such a great episode.
This episode has more character development and discusses more important issues than most seasons on other shows. Among the things that the characters in this episode are going through is fear of commitment, guilt, difficulty in moving on, drugs and depression. And that’s just off the top of my head.
I won’t touch on all of those, but I will say that Buffy does the best job of discussing depression of anything I have ever seen. And whether you have clinical depression or just are feeling down it’s great to see a character that is a hero that is doing the same. (some spoilers ahead). In this case Buffy is depressed because she was in heaven and brought back to life. She is going through the motions of life, but isn’t feeling any of them. And this episode is the most important part of this arc of the character because it is the episode where Buffy finally tells her friends the truth.
Finally it deals with one of the most annoying things on TV. No one telling anyone anything. This is perhaps the most common way that plots are dragged out in modern TV as each of the characters hides things from the others. This episode removes that crutch and makes the rest of the season better because they actually have to deal with what happened.
I understand why so many other episodes of TV are often higher on lists than this one. Series finales often feel more important because they are final and it’s easy to assume that the musical episode of a TV show just can’t be all that important. But in the hands of a master this episode moves from laughter to tears, deals with important personal issues for every major character and still fits in several excellent songs.