Continuity mistake: When Buffy is discussing the Turok-Han with the potential Slayers in her dining room, one of them says that it almost killed Buffy. Rona then spreads both her arms out and says, "What chance do we have?" In the following shot, her left arm is down by her side and her right arm is resting on the dining room table.
Continuity mistake: Towards the end of the episode, during Buffy's fight with the Turok-Han, at the construction location, her shoes are very obviously some sort of practical flat shoe, but during her speech afterwards, she is wearing fashion boots with heels.
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.