I'm playing 2.5
Smoke is not useless. Aliens will not target a unit hidden in smoke (although they technically can 'see' it). Also, shooting and hit chances are the same for every actor in the game, altered by skills and stats.
Not absolutely sure, but somehow my feeling is, in 2.6 the battlescape is easier to solve than in 2.5, so you could go and try that. You can mod the stats of aliens and recruits without much effort, as you can change some modifiers to make the battles easier for you.
I will try to give my general plan (in 2.6). My squad is usually build from one Scout/Cannonfoder (Sniper Rifle + extra TUs), one Sniper (Sniper Rifle + extra TUs), four Assault (Assault/Plasma/Laser/Assault+EP rifles, Armour) and two Grenadiers (Grenade Launcher, Armour if possible). This changes, depending on the map. So I might replace the Grenadiers by Close-Quarters-Combat-Cannonfodder (in maps like city3 parking lot), or replace an Assault by an additional Sniper.
The scout goes first, looking to find the enemies position. The Assaults secure the area, the Grenadiers and Snipers follow in safe positions.
1) I rarely hide my units within smoke, simply because they cannot see anything this way. More often I use smoke to block the 'line of sight', so my soldiers can get into good positions safely.
2) Use strong recruits with otherwise bad skills/stats as scout with Sniper rifle and extra TUs. The extra TUs are important, as it gives a chance to spot the enemy and then move back into a save position. The Sniper Rifle is the only weapon that as a chance to hit & kill some opponents in early game. Again, the extra TUs help, as the scout can shoot and still move. Dont care if you loose your scouts frequently, but if one survives some missions, he might be good enough to be promoted.
3) In general split your actions into spotting and attacking, with different actors. So, the scout spots the enemy, the Grenadier or Sniper tries to take him out from a save position. This prevents you from taking the Reaction fire of your enemies. Also, if you fail in killing the victim, the scout can retreat and everybody is save during the aliens turn.
4) I don´t use reaction fire until I have Laser rifles or EP-ammo. It´s useless. With Laser rifle and reaction fire set on Pulsed Fire mode, an experienced Assault in Nano-Armour has a very good chance to win a direct duel against a Combat Hovernet, if in a good position.
5) Consider blocking passages by fire fields from Incendiary grenades. Aliens usually try to avoid walking into, so there is no need to guard in this direction.
6) Arrange your squad occording to the map. This might be a problem, as it requires to know the map. If in doubt, play the map in Skirmish to check how it is build. Some maps require a lot of long range fire power (farm, frozen, desert - short range weapons are useless), while others favour close quarters combat (oriental, harbour2).
7) If in trouble, don´t hesitate to sacrifice weaker units to protect the stronger ones. Oc it depends, which unit is 'better'. For me Scout dies first, Grenadiers are easier to replace than a Sniper, a good Assault (multi functional soldier) is priceless.
8 ) Try to get PB-Grenades and EP-rounds as fast as possible. They are unmatched.
Hope that helps.