Do you know why there's so much smoking in film noir? Because there's so much talking in film noir.
When your story calls for some extended conversation with little or no action, those characters need something to DO. In some cases they need to act to support the dialog. But a lot of gesturing about isn't appropriate for some scenes or characters. Say, cool detectives and hardened feds exchanging info on a possible perp. So what can these characters DO while engaging in vital, story-developing dialog and maintaining a collected, cool demeanor?
They can smoke. It's a convenient device that's become a staple of detective fiction.
Also, it's period. Don't mess with it.
The conversational bits are always tricky. This is why there is almost no dialog in the stuff I do for myself. Writing dialog stresses me out, and I tend to fall back on pictures. Clay, however, writes excellent dialog, and so I am forced to grapple with these storytelling issues.
I recently read Stuart and Kathryn Immonen's Moving Pictures, which I highly recommend, and Stuart does a FANTASTIC job of handling the chattier pieces of story. I need to spend some more time with it and make some notes.