Resource leveling is used when the resource is over utilized. For example if a resource is allocated for 16 hours in a day for an activity, after the resource leveling he will be allocated for only 8 hours on day 1 and rest 8 hours for day 2. The impact here is extension of the schedule.
Resource smoothing is used typically when the resource is allocated for multiple activities and who can work only a few hours on a particular day or an activity. For example a resource is allocated for 4 hours for an activity and 4 hours for another activity, that resource will be used for non-critical path activity where we are having floats. Hence there will be no impact on the schedule and may impact the free float or total float.
Resource leveling is one of the features under MS Project which you can experience it.
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