Just to elaborate a little, smoothing kind of blurs the hard edges between color breaks. If you have a small enough image, and zoom into a level close enough that you can see the details (in the preview pane), but far enough away that you can still see enough of the big picture for reference, and then adjust the smoothing to 100% it will look as if someone took a picture of your image, only out of focus. It can have some benefits for the right type of image, yet I hardly ever use it as most of the images I develop are for web or applications, and since they are already small, I need as much detail as I can get.
One thing to consider using is the .gif format as opposed to .jpg. Not only can you do animations as a .gif (if the need arises) but you can also optimize the output for a smaller file. By reducing the colors to only the colors in the image (Adaptive) you can eliminate alot of extra info in the image.