Okay, since the First can take on the form of any dead person how can it take on Buffy's form? Is it because she's the slayer or because she has died twice before?

Because she had died before :)

That's what I thought. But wouldn't she have to stay dead for him to assume her form?

Apparently not and he was able to assume Spike's form too, being undead and all, remember?

*slaps forhead* Blonde moment! Yup, he was Spike too. So I guess all you have to do is die to have the First take on your likeness, you just don't have to stay dead.