Revealing mistake: When Anya sings her song about how she will become Mrs. Harris, she spins Xander's chair around after putting a blanket on him. When she is also sitting on the chair, and you see an overhead shot of them both, you can see a section of the stage floor rotating beneath them keeping the chair spinning.
Continuity mistake: In the flashback to St. Petersburg, 1905, just after the burning man runs out of the room, Halfrek mentions the Revolution. Between shots, Anya's champagne glass switches from her left hand to on the table and back.
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.