Deliberate mistake: After Jenny pushes the janitor's cart into Angelus and runs up the stairs, there's no physical way he could be waiting for her at the top of the stairs (even with vampiric speed). Joss Whedon has admitted in interviews that he put in this blatant continuity error as the situation is a staple of the horror genre (girl runs from villain, only to find him standing right in front of her).
Audio problem: Jenny prints off the translation for the Ritual of Restoration from her computer, then spots Angel sitting across the room from her. As she gets up and starts walking towards him the sound of the printer can be heard but the paper has already finished printing.
Chosen answer: Angel is saying that he is still jealous and Buffy recognizes that this is his way of saying he wishes that they could be together. That is why they both smile.