Ghastly did answer the question real well and without spoilers (my favorite kind of answer at least until I'm desparate). However, how can Buffy get by without sleep?
A quick guide to leveling and capping leveling, starting with the basics:
Your character gains a level when s/he gains ten major skill increases. Major skills start out at at least 25 (not counting bonuses). Since the skills max out at 100, that means that you can, at most, gain 75 skill increases for each major skill, for a total of 525 for the seven major skills. Since it requires 10 major skill increases for a level up, that means that you can level up, at most, 52 times. The odds are that it will be fewer than that, since at least some of your major skills will be specializations, which get a +5 bonus, and you'll probably gain some bonuses from race, leaving only 70, 65 or maybe only 60 points to be gained in a given skill. In practice, most characters, if played until all of their major skills are maxed, get to about level 49 or 50 (there are exploits you can use to get around that if you want, but I won't go into that here).
Since the game is leveled - that is, the opponents you face and the treasure you find depends on your character's level - there are various notable points in the game at which you open up a lot of new things. Level 20 is one of those points.
The way that you cap leveling is simply to pick some number of major skills that won't be used at all. If, for instance, you only use three major skills, then you can only get, at most, 225 skill increases (3 x 75), for, at most, 22 level ups. That's what Acadian's done with Buffy, though she started out with enough bonuses and he's fine-tuned it so that she only got 19 level ups. Now that she's level 20, there's enough stuff available in the game to make it interesting, but she's not a level 50 superhero - she's just a little slip of a level 20 Bosmer girl.
So it's not that she qualifies to level up and just doesn't sleep. She just doesn't gain the necessary skills to level up anyway. She already has all the combat and magic skills she's going to get, and they're sufficient.
I'm sure Izzo was having a really bad day so we should all forgive and forget. He's just needs more :icecream:
You should've been here to :slap: me when I was writing that last response. I kept telling myself, "It doesn't matter - just let it go - fight fire with marshmallows...." but I just couldn't do it. But you're right.
:icecream: