Give me advice on grenades and smoke

[The Reaver of Darkness]

I wouldn't say smoke is overpowered. It can be dangerous to use it at times, and there are other ways to take advantage of enemies.

I tried a cool trick: I equipped my soldiers with smoke-spreading weapons plus some autocannons (arcing shot) with HE. I used motion scanners and under smoke cover used the scanners to see the aliens and shoot them. This also worked for seeing them within orchards or behind hedge walls and the arcing shot was able to hit them regardless. You could also use grenades to hit them this way. It worked great outdoors. It was viable for barns if you were willing to blow the structure away to get at the aliens. But the smoke was ineffective inside the alien ship and the equipment the soldiers were carrying was garbage in that situation.

[Hobbes]

It's often advised, but when I've tried to establish a standard practice of it, I got shot in the face several time through the smoke, by aliens in high levels (sectoid sniping from barn window, floater walking on a roof)
I suspect the default smoke pattern is less dense above ground zero, and/or the line of sight algorithm happens to more easily find a path that avoids 3 full smoke tiles.

Explosions are limited to 2D on the original and OXC (unless you use the option for multilevel explosions). This means that soldiers inside the Skyranger will not be covered by a smoke grenade thrown to the bottom of the ramp. This is why some players use 2 smoke grenades on first turn, one at the top of the ramp and the other at the bottom.