Continuity mistake: When Willow confronts Andrew outside the butcher shop, her hair changes position between shots throughout the entire scene.
Continuity mistake: When Buffy ties Spike to a chair before the opening credits, she ties a rope around his left arm three times. But two extremely fast shots later, the rope is tied around his left arm four times.
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.