Gah... I think it's on the second disc, after the Garden (Balamb) has crashed into FH. But that could of been on the first disc. I forget. Whether or not Irvine says it depends on how you've treated Rinoa up to that point in the game. (eg. If you've been mean, and dismissed her flirting and emotions, or if instead tried to be flirty with her and sympathetic towards her emotions and beliefs/causes. I forget which way you have to treat her to get Irvine to say this.)