Continuity mistake: When Buffy opened the trunk for the first time, the corpse of the real Ampata is lying with its head to the right of the trunk. When she opens it the second time, the corpse is lying with its head on the other side.
Continuity mistake: Ampata tells Buffy she has no lipstick, but earlier that episode we saw her using lipstick, in the high school bathroom right before the bodyguard attacked her. (00:24:20 - 00:25:40)
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.