Some Assembly Required - S2-E2
Continuity mistake: In the episode 'Some Assembly Required' Eric takes photos of Cordelia and Buffy near the start, when he's developing them later the poses in the photos are different to the way the girls were standing at the time. (00:06:40 - 00:19:05)
Some Assembly Required - S2-E2
Continuity mistake: When Cordelia is being tied up in the corridor, Buffy leaps up, kicks the attacker, and drops to the ground next to Cordelia. In the next shot the attacker is stumbling to his feet, and Buffy is standing again, then quickly kneels down beside Cordy.
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.