Beneath You - S7-E2
Revealing mistake: When Buffy throws Spike into the benches at the church you'll notice that as he is about to hit the floor there is a blue mat where he lands. (00:36:15)
Beneath You - S7-E2
Continuity mistake: Shortly after the opening credits we see Buffy, Dawn and Xander driving to the new high school. As they're talking, the rest of the credits roll by onscreen. Just after "Producer: Marc David Alpert" is shown, there is a side-angle shot of the car and you can see Xander's left arm resting outside on the open door window. But in the following shot he has both his hands on the steering wheel.
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.