
Continuity mistake: When Chihiro first speaks with Yubaba, Yubaba puts a bag of coins into a box, and closes the lid. She then lights a cigarette and starts smoking. Then in the wideshot, when she blows out smoke and starts cackling, the lid to the box she closed is now open. (00:35:00 - 00:35:40)
Chosen answer: There is no real answer. It is intended to be left unknown. See http://www.straightdope.com/classics/a5_266.html for The Straight Dope's answer.
Guy