With my fondness for episodes where things get a little crazy, I have to choose Episode 2x06: Hallowe'en.
I remember when the BBC first showed this while I was at University, they gave Buffy a bizarre hiatus in the middle of Season 2, five episodes in, right after "Reptile Boy", but they often disrespected their US imports like that.
This one sounded good from the get-go, really. It introduces Giles' nemesis Ethan Rayne, who I wish had appeared again after Season 4 (though Robin Sachs' dying might have had something to do with that), as he enchants the costumes in his shop so that the wearers turn into whatever their costume represents.
So, kids start turning into demons while trick or treating, and because Buffy and Xander are in costume, they take on the characteristics of their costumes, forgetting who they are (sort of an early version of Season 6's "Tabula Rasa").
On the other hand, Buffy encouraged Willow to wear an eye-catching outfit, but because of her friend's shy, introverted nature in the early seasons, she panics and covers the outfit up with her less sexy ghost costume. So, the effects on Willow are a bit different, when she falls dead on the spot and ends up as the ghost of Willow, wearing the outfit Buffy got her to buy.
Spike decides to take advantage of the chaos and start causing trouble, until Giles confronts Ethan and breaks the spell. While everyone wonders where Willow vanished to, she is returned to her body, but throws the ghost costume in the bin, leading to a nice moment when Oz (in only his second appearance) spots her out of the window (it is clear that he fancies Willow quite a lot by this point).
So, overall an enjoyable episode - a good mixture of comedy and drama this time, as well as fantasy and horror.