Hmm, I think the way it always came across to me, is that the soul acts like a moral compass. Soulless-Spike tries to be good, but often makes the wrong call (chaining up Buffy to explain that he loves her?). In a sense, most demons and evil creatures have no choice, except to be evil. Once you have a soul though, you can choose good or bad!

I think that for Buffy the soul is what makes the difference. She sees Angel and Angelus as separate beings, which Angel himself doesn't really - he takes full responsibility for what his soulless self did. Same with Spike of course, although interestingly enough, up until Damage he seems to repress it.