Continuity mistake: When Faith is waking past the movie theater, the same couple passes behind her in 3 identical shots. (00:19:29)
Continuity mistake: In 'This Year's Girl' when Faith is taunting Joyce with all Buffy's uncollected mail she flings the envelopes across the bed one by one, scattering them. When Faith is fighting Buffy later on they are all in a pile again. (00:37:20 - 00:38:40)
Continuity mistake: When Buffy and Riley are in Buffy's room, Buffy holds Riley's hand with both of her hands and says to him, "Is there anything I can do?" But in the following shot she is holding Riley's hand with only one of her hands.
Continuity mistake: In the scene near the end when Faith is putting Joyce's lipstick on in the mirror and taunting her, it is obvious that the make-up department forgot to put Faith's tattoo on her upper arm. It's obvious if you watch back and forth between the mirror and the shot of Faith standing and turning, there is no evidence of a tattoo that has been established Faith has in the previous season.
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.