actually, that's no pet theory you have there. Whedon says as much somewhere in the interviews on the Season One DVDs. actually, he says Xander is him with more muscles.
He said 'doesn't want to' not 'can't'. Buffy apparently knew he was lying, anyways (if a more recent episode is to be believed). Note that he has to decide, he doesn't just jump straight to the lie.
Read what he said: "Personaly, I think Xander can't lie becuase deep down, he doesn't want to lie."
I added the italics. Yes, he did say "Xander can't lie."
As for whether Buffy knew he was lying, I can't find a direct quote, but Buffy says in a recent episode, "You and Willow were cheering me on. You told me Willow said to kick his ass," to which Willow replies, "I never said that!" or something akin to it.
If Buffy knew at the time that Xander was lying, I think she would've reacted much differently both during Becoming pt. 2 and during that particular episode.
