Other mistake: Early in the episode, Clark uses his heat vision to blow up a police car. In the shot where we see the policewoman diving for cover, there is a front view of the car as it is exploding. The license plate on the front of the car IS a Metropolis plate, however, as the plate falls off, the white placard that auto companies and dealerships place in the license plate frames on new vehicles before they are registered and which are removed once plates are installed is visible. (00:07:10)
Other mistake: In the flashback to 1961, "Splendor in the Grass" is playing at the Talon. However, the film was released in October of 1961 and Louise McCallum was killed in June of 1961. So the flashback would be set before the film was released.
Other mistake: When Clark confronts Jason Dante and tells him the race is off, one of Dante's thug friends picks up the krptonite/nitrous oxide booster tank and only then does Clark start feeling the effects of the kryptonite. Even though the tank had been sitting out uncovered well before the guy picked it up.
Answer: The kryptonite only creates mutations when it reacts with the environment and an individual. Remember, the FDA and several environmental groups did check out Smallville after the meteor shower, but found no danger in the rocks. Obviously they're not always emitting mutating rays, or all the flora and fauna of the surrounding area would be horribly mutated.
Phoenix