Welcome To The Hellmouth (1) - S1-E1
Plot hole: There was no need for the master wait 60 years for the night of the Harvest, when all he had to do was have his minions kidnap and gather a bunch of humans and bring them down to where he is so he could feed on them himself and escape 60 years earlier.
Plot hole: In "I Robot, You Jane", how exactly does Willow scan Moloch out of his book when the scan is only about two thirds the width of it? (00:04:25)
Plot hole: Angel says he cannot give Buffy mouth-to-mouth because vampires have "no breath." However, throughout the entire series, vampires are shown to breathe, and are able to do things like smoke, gasp, get choked out, etc. (Granted, the franchise also confirms a vampire cannot die from asphyxiation, but still they're shown to breathe regularly).
School Hard - S2-E3
Plot hole: Willow and Cordy disappear during a vampire attack. We later see that they spent the entire night hiding out in a closet, but wouldn't Buffy have gone looking for them once the vampires were gone? She knew they had run off somewhere (she mentions it to Giles when she gets a stake from the library). Instead she just goes home, leaving them still missing as far as anyone knows. (00:41:25)
School Hard - S2-E3
Plot hole: When Buffy and Sheila are walking out of school after the meeting with Snyder, Xander runs up to talk to them. He mentions during this scene how Buffy will be helping out at the Parent-Teacher Night, but he shouldn't know this - Buffy only just found out about it in the meeting with Snyder.
Plot hole: When Ampata is first released from her imprisonment, why didn't she break the seal then? She knew the only way to re-mummify her was to put the seal back together, so why not shatter it completely instead of leaving it in large fragments? (00:08:40)
Plot hole: Giles tells Willow to leave him while he extracts information from Ethan on how to break the costume spell. By the time Giles smashes the statue Willow has already found the others, who had left the house where she thought they were and are hiding in a completely different area of the town. No matter how long it took Giles to beat the information out of Ethan, there is no way Willow could have gotten back to the house, realised they were gone and tracked them down before the spell was broken. As a ghost, it is possible she could have happened across them even though they were hiding, but seems unlikely.
Plot hole: After losing his soul, Angelus kills Jenny Calender's uncle, who is a descendant of the gypsy clan who cursed him. But, since there is nothing to suggest the uncle's room is in a public location, Angelus couldn't have gotten in the room without an invitation.
Plot hole: In the flashback to Buffy in L.A., how did Angel get there with the front windshield of his car blacked out? Being a vampire, he obviously needs it during the day, but he also wouldn't be able to see traffic. And it just seems to be too much of hassle for him to remove it at sunset, just to reapply it at sunrise, just to remove it again, etc.
Plot hole: When Buffy enters the house to rescue her mother she uses a stake to stop the front door from closing. A vampire then grabs it and the door closes. Why did Buffy use a stake knowing that there was a vampire there when she was almost killed by a vampire with her own stake earlier in the episode because Giles had been injecting her with a muscle relaxant?
Plot hole: Healing Angel requires draining the blood of a Slayer. Buffy tries to kill Faith in order to get some of her blood but Faith gets away after Buffy stabs her at the end of "Graduation Day Part 1." The amount of blood on the dagger that she used wouldn't be enough blood to heal Angel, but it'd be a start. So why didn't Buffy just use some of the blood on the dagger? In the very first shot of "Graduation Day Part 2" we see the dagger coated with the stuff.
Plot hole: In 'Graduation Day pt 2' the Mayor has his vampires stand at the bottom of the steps leading out of the school to stop any escaping students. The thing is, all the parents managed to escape out the side exits. Since the Mayor was expecting all the students to try and run too, why didn't he have these exits covered? (00:33:15)
Plot hole: Spike must have had his chip implanted while he was unconcious. If so, how did he attack The Initiative scientists without any pain when he tried to escape? You could argue that they programmed him to be capable of violence within The Initiative only, but why would super smart scientists program an evil being to be able to escape at the first opportunity? Joss Whedon has acknowledged this as an oversight.
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.