Continuity mistake: In episode 'Same Place, Same Time', Gnarl cuts Dawn across the stomach paralysing her and ripping her shirt, but when Buffy and Xander are carying her home there is no tear in her shirt or any blood. Also when Buffy goes back to kill Gnarl he tears her shirt but seconds later the rip has gone.
Continuity mistake: In the final scene with Buffy and Willow at the end of the episode, the position of Buffy's right bra strap keeps changing throughout the entire scene.
Visible crew/equipment: After Gnarl poisons Dawn and traps Willow inside his cave, the shadow of a camera is visible on some bushes on the left side of the screen as we see Xander and Buffy carrying Dawn home.
Other mistake: We're shown a variety of photographs and pictures of different members of the gang at one point. One of those, the one of Xander and Anya, is actually a shot from the episode "Something Blue". I doubt very much that during the events in that episode, someone conveniently decided to take a photograph.
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.