Audio problem: When Giles and Miss Calender are walking through the halls at the beginning of the episode there's a kid at the vending machine, we hear the coins rattling but he never puts money into the slot. In fact, the money doesn't go anywhere near the slot.
Audio problem: When Jenny and Giles are talking and Jenny is talking about the festival, they walk behind a drinks machine and then her lips don't match up with what she says.
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.