Yes, Xander has been honest with his assessments even when he disagrees with Buffy, but still he stands by her despite the choices. (With the sole exception of the Season Seven ending when she seemed to have stopped trusting anyone, and even then, in short order she entrusted the safety of Dawn to him.
By "normal relationship", I think he meant "with someone who can understand your mindset and attitude, and support you, and who is also human rather than a vampire". And whatever feelings she might have had that it was a bad idea SHE went after Riley because SHE decided Xander might have a point and the balance of information was in favour of giving it a try.