Continuity mistake: Dean drives the Impala to the coroner's house at the same time Sam is driving Castiel and Jack back to the bunker, also in the Impala. (00:31:15 - 00:33:45)
Continuity mistake: After Dean zaps the TV with the remote, he lowers his right arm. The next shot behind Dean's right side shows him lowering his arm again.
Continuity mistake: When Jack tries levitating a pencil, the pencil completely vanishes after he sets it down again.
Answer: Angels themselves may not have genitalia, but their vessels do. Nephilim occur when an angel in a vessel reproduces.
Greg Dwyer