In a lot of ways, this episode continues what was set up in "Becoming (Part 2)," with the groundwork being laid for Angel's own spin-off (and by this time I have to assume that Angel's development was already in full swing). Angel is continuing to grow beyond being simply a love interest for Buffy, and there are moments in this episode when it seems more like Buffy is a supporting character in Angel's drama than the other way around. Making amends for his past wrongdoings is the core of what motivates Angel, and it's now clear that his relationship with Buffy is only a part of that journey (albeit a very important part).
"Angel, you have the power to do real good, to make amends. But if you die now, then all that you ever were was a monster."
So while that makes a lot of sense and seems like a pretty logical place to take the character, what makes less sense is to cast Angel's struggle in this episode as a battle against the primordial First Evil. The questions that this raises are altogether too distracting in an episode that's ultimately about Angel and Buffy's own personal struggle with themselves and each other. It's not really necessary to drop the biggest conceivable Big Bad into this story just to play mind games with Buffy and Angel, especially when it isn't going to do much else. One might assume that this is a thread they intend to pick up on, but it's one that's left dangling for a very long time.
As for the schmaltzy "Christmas miracle" snow ending, well, it feels a bit out of place as well. But using a weather event to mark the outset of a new phase of development for a hero (in this case Angel) isn't too strange. I think overall, despite its problems, this episode holds together because of Joss Whedon's excellent writing and direction. The man does very well with surreal dream sequences, and this episode is a great example of this.
It's a bit of a shame that Jenny Calendar's return doesn't involve any kind of interaction with Giles, but her function in this episode, as an apparition of the First, is directly related to her death at Angel's hands, and there's enough going on in this episode without cramming that in there as well. Overall, the episode stands pretty well, and it serves as a fitting final send-off to the character, who is, as far as I can remember, rarely if ever mentioned again.