it really did look like if they did have sex, it definitely didn't go very well

Exactly. I mean, the fact that we're not sure if it was reality or dream makes it trickier ... and then, if it was a dream, was it a dream based closely on reality, or was it Buffy's subconscious brain going "you know, if I ever had had sex with Xander, it probably wouldn't have gone very well!"?