I like the Smith machine for squats but it IS a different motion (at least for me) than free squats. It comes in handy when your best spotters are not available and you don't want to trust your ass to some random gym rats. However, it took a lot of experimentation to find just the right stances and technique to feel right. The straight as an arrow up and down motion leaves alot to be desired in my opinion. That being said, I have achieved more wieght on the Smith machine than free standing (565 vs. 495 - 3 Rmin). The Smith machine can help or hurt you. Specifically, I mean that it seems that you can learn to 'use' the machine to lift more but alot of people complain it bothers their knees or lower back.
As in all things, I believe that whatever works for you is best, and there is never just one way to lift.