smoke coming from engine area and smells

That smell and white smoke are from oil burning on the hot surfaces under your hood. You, my friend, have an oil leak. Unfortunately, leaking oil is just part of car ownership, especially when cars get older. Oil leaks can also stem from a loose seal somewhere. Check the seal around where your oil filter screws in to the car; that's where the big one was in my Celica and it was easily fixed by replacing the filter and tightening it when I put it back on. There are so many places oil can leak from, it may take some time, money and parts before the leaks are found and fixed. Aside from the cost of oil and the effect it can have on the environment when its dripping on to the ground, your car can run just fine while leaking oil, provided that you keep an eye on your oil level and top it off when needed.

I have owned a 1998 Toyota Camry and still own a 2000 Solara. Both cars as well as Toyotas friends have tend to develop oils leaks around the cam covers. On a V-6 engine, the front cam cover gasket is easy to replace but the back cam cover is more difficult and requires removal of the intake manifold. The gaskets are only about $20 but labor will probably run you over $100 if you have a shop do the job. I recommned replacing the seals if you plan to keep the car...the smell will get inside the cabin when you pull up to a redlight. If you choose not to do the job, just keep an eye on the oil level but leakage is really very minimal in most cases. A little oil can make a lot of smell and smoke!