Here is Joss' explanation, circa March 2000 http://www.etonline.com/television/a2760.htm
LYNN: Two questions that you have given conflicting answers
for in the past -- how old is Spike (over 200 or 126), and who's
his sire (Angel or Dru)??? What are the official answers?
JOSS: I don't have the math in front of me to figure
out Spike's age, but it is closer to 126 than 200. I believe it
was in 1850 that Angel made Drusilla and then Drusilla made Spike.
Now, this is where it gets confusing for everybody, your sire
can mean anybody in the line that made you. So, Drusilla is Spike's
sire, but so is Angel in the sense that Angel made Drusilla and
Drusilla made Spike. If we were being more literal we would call
him a grandsire, but that term does not exist in the vampire world,
so sire just means somebody that you are connected to because
they came before you on the line. By that reckoning you could
say that Darla is Spike's sire since she made Angel.
The answer to this question is really "None of our Business".
James has contradicted himself on his age so many times as to
make anything he says on the subject utterly meaningless. However,
according to the California birth database, one James Wesley Marsters
was born August 20, 1962 in Greenville, California.