Having now seen the ep on my TV and not the tiny download on my computer I can see (and hear) the bad dubbing. One possibility is that they rewrote James lines after filming was complete. I know ME has altered dialogue in post production before. But, this would be a very extreme case of doing that. What made me think of this is the scene early on where Spike is questioning Angel's deal with W&H and his back is to the camera for quite some time. When we switch camera angles and see him talking, you notice the dubbing is out of sync. While rewrites could explain that scene's technical problems, I can't really explain other scenes. And on one occassion I even wondered if it was James' voice since he sounded so off.
How did Gunn know who Spike was? After Angel and Wes mention his name, Gunn seems to know Spike by reputation while Fred is clueless to who he is. Was this knowledge of key players in the demon world another part of the W&H brain dump?
Finally, I noticed at the end, as Spike shares his fears with Fred about going to Hell, he tells her how terrified he is at the prospect. I have to wonder if pre-souled Spike would feel the same way. He's faced death many times before (even tried to kill himself) and never seemed scared of what the afterlife held for him, he just accepted it as part of a vampires fate.
Actually I think this bodes very well for Spike. After all, fearing eternal damnation seems a rather human trait.