Continuity mistake: In the basement, immediately after Buffy pulls her hand out of the demon's chest, her fist is completely dry. Two shots later, it is covered in gooey demon fluid. (00:40:35)
Continuity mistake: After Buffy decides not to take the antidote to the demon's venom, we cut to a scene at the mental institution. She says she wants to go home with her mum and dad. As she says this her dad puts his hand on Joyce's left arm. In the following shot, Joyce suddenly has her right hand on top of his when it wasn't in the previous shot.
Continuity mistake: After Buffy decides not to take the antidote to the demon's venom, we cut to a scene at the mental institution. The doctor talks to her about ridding her mind of the things that support her "hallucinations". As he talks to her about this, the position of his hands change from pressed together in front of him to in his pockets between shots.
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.