Continuity mistake: In the beginning, when Xander is practicing asking Buffy out with Willow, at once point Willow puts one of her snacks (candies, I think) into her mouth and starts chewing in a medium/wide profile shot of the two. It then cuts to a closeup of her and instantly she's no longer chewing, and immediately places a second candy in her mouth. She didn't have time to stop chewing and swallow between cuts.
Continuity mistake: When the earthquake happens at the start of the episode, and we see the Master celebrating, his hands instantly change positions at least twice between cuts. (Sometimes it matches perfectly between cuts other times they're in an entirely different position between cuts).
Continuity mistake: When Buffy stakes the first vampire at the beginning, in the first shot, his hands are in towards his abdomen. When the camera cuts behind him, and he falls back, suddenly they're instantly extended partially outwards to either side.
Continuity mistake: When Cordy stops kissing her boyfriend and says "What was that?" at the beginning of the episode, the lighting on Cordy's face changes completely as it cuts between the two camera angles. In the first angle, the lighting is much darker and shadowy, while in the second angle, her face is suddenly much brighter.
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.