Somehow I think that if Catherine asks Buffy for advice, then Buffy's response would be "Good luck trying to talk some sense into the little butt-pain. At this point I think the only way you'll get her off of Greg is to somehow get Xander here to distract her. Oh, Xander? One of my best friends since sophomore year. Been with me through the Slaying and everything. He's even saved my life a few times. His age? He's my age but thinks of Dawn a a little sister so he'd never touch her. Still, she's had it bad for him since she was old enough to care about boys beyond the hair pulling and punching stage. put an unattached Xander in front of her and Dawn will at least split time between him and Greg if not give up on Greg altogether."
Granted that comment might make Xander's life Hell, but such is the peril of being a Scooby.
...And then you have Xander there, possibly attracted to Catherine herself given his attraction to strong (and older if Anya is anything to judge by) women. So you have Xander there not knowing he's really there to distract Dawnie as he lusts after Catherine, and Dawn gets upset that her much older sister is taking Xander's attention away from her.
