smooth polygons isn't  a raytracing feature.  iirc, it doesn't quite work with any raytraced effects.  this why you lose all smoothing if you use the bagginsbill artistic lens trick, which involves seeing the whole scene through refraction.  bagginsbill and pjz99 had a thread discussing and demonstrating this.  the issue was that there was a small-scale artifact (i think involving AO?) caused by the non-raytraced aspect of the Poser renderer, and while the lens trick got rid of the artifacts, it also got rid of smoothing.  so it doesn't show up in refraction, and i'm guessing not in reflection either.