First off, I stole 'kerfuffle' from anniesj. It's such a great word to describe all this. Oh, and do read her latest entry - sums all this up marvelously. :)
Now, I've read various LJ's and Con reports (most of which have been civil and well balanced) on the boards to have a pretty good idea of what was said. Having seen James last month in Chicago, most of what he said sounded very familiar to me. The only new aspects were his interpretation of events in Chosen (don't worry my Brit friends - I'm saving my comments on that subject until later).
Honestly, why some segments of fandom are suddenly getting their knickers in a twist is beyond me. He's entitled to his opinion and I don't see how it alters anything we've seen played out on screen. The writers are the ones that did and still do dictate the storyline - he can't change it. Nor, from what I understand of him, he doesn't feel he should be able to. He's simply giving us his interpretation of events and if it doesn't gel with ours - so what? I still see things the way I see them and I still respect the man. I'd rather have an honest opinion then to have someone kiss my ass (um, well, actually, it is James so....uh, nevermind, thoughts drifting...)
Fandom has become very splintered in the last year or so. I think there are people out there that are jumping on comments he made and twisting them to suit their own agendas - wether it's to show how faulty the writing was, why a certain ship is the 'true' ship, or to chastise other segments of fandom for their beliefs.
The thing is it's so open to interpretation I think it's forced James to take a bit of a hardline stance. Knowing his views on violence and particularly towards women, it's got to scare him when young girls tell him how much they admire Spike. Spike was evil. He did some horrendous things and too many people seem to forget that and hold onto a romantic ideal. The character of Spike has come a long way and should be admired for his journey - for making a choice to overcome what he was. But his past should not be whitewashed.
James even makes a good argument for why Buffy and Spike should not have been together last season as well as why it might not work now. Somehow I manage to both agree and disagree with the guy. The funny thing is, if there were only one correct way to interpret the show and characters, there wouldn't have been a Hell of a lot to talk about these past seven years.