"I Only Have Eyes For You" is hard to explain in a few paragraphs. The episode is constructed on two levels. First of all, the high school's being haunted. It seems that a Sunnydale student named James fell in love with his teacher back in 1955. The teacher, Grace, tried to break things off, because she wanted James to have a normal life. They argued and he shot her. Distraught, he then turned the gun on himself. Now the couple's final moments are playing over and over in Sunnydale High's hallway. People become infected, making them act out James and Grace's argument and the shooting. Not only that, but snakes are appearing in the cafeteria, wasps are swarming out of nowhere, and other poltergeists-y events are happening throughout the school. Giles is convinced that it's Jenny's ghost, but the Scoobies aren't so sure. They investigate and realize that it's James that haunting the place and that they need to exorcise him.
On the second level, there is Buffy and Angel's relationship. Buffy acts openly hostile towards James, but as the episode progresses, it becomes more and more apparent that she's identifying with him. James killed the woman he loved in a fit of passion, and Buffy destroyed Angel when she slept with him and he lost his soul. James and Buffy both blame themselves and, now, they're after the same thing: forgiveness from the people they love. The episode concludes with Buffy and Angelus in the school, playing out Grace and James's last fight. Only instead of infecting the another man, James chooses Buffy to play his part. With Angelus as Grace, the words of the argument take on a whole new meaning. Suddenly, Grace crying that she she just wants James to have a normal life, becomes Angel saying it to Buffy. And when Grace and James finally find resolution and Grace tells James that she loved him with her last breath, it's also Angel whispering it to Buffy. It's beautifully done.
There are so many great parts to this episode. Buffy and Angel's scenes are just wonderful. And I love the way Grace and James' argument is edited and replayed over and over with different actors playing the parts. Also, Gile's wanting to believe that Jenny is trying to contact him is so sad and sweet. I'm not sure he ever fully recovers from her death. He really loved her. On a lighter note, Snyder snapping that he's seen "JFK" and knows all about the conspiracies that he's sure Buffy's involved in is hilarious. And you have to laugh at Cordy and Xander speculating that if the school is destroyed, they might automatically graduate. What teenager wouldn't have though of that angle? Also, this episode introduces some new things to the Buffyverse. Angel's mansion is shown for the first time. Willow's interest in magic is sparked after reading through Jenny's techno-wicca files. And this is the first time we get a mention of Sunnydale's Mayor, who will dominate season three with his cheerful, evil, '50s TV Dad-ness. Anybody who can frighten Snyder has just got to be fun.
On a side note, "I Only Have Eyes for You" is also later cited in the "Angel" episode "Waiting in the Wings." Where he and Cordelia are possessed by dead lovers at a ballet.
I don't have any real complaints about this episode. However, I do wish that they had brought up that rose quartz necklace of Jenny's again. Willow gave it to Giles, and that's the last we see of it. It should have been reintroduced in later in the series. Maybe in season five after Joyce's death he could have been looking at it. It would have reinforced Giles' sense of loss. Also, since Angelus destroyed Jenny's computer in "Passion," I don't see how Willow could have gotten any files off of it.
My favorite part of the episode: Spike standing up out of his wheelchair at the end. I wonder how long he's been biding his time, faking his injury and plotting. Angelus and Dru should have suspected that he was up to something, considering how calm and quiet he's been acting. When Spike stops fighting back and starts smirking like he knows a secret that nobody else is in on... Then he's usually cooking up a plan of his own.