The smoke is possibly a very nice gadget called a "fuel burning heater", it burns small amounts of diesle to heat the engine coolant up a bit quicker and will kick in on cold days. They are prone to the odd fault, run a search on this forum for "FBH" or "fuel burning heater" to find some useful information.
As the the pedal travel, it could well be warped disks, relatively easy to check, whip the wheel off, put something in contact with the disc and rotate the wheel slowly, if the disc is warped you will either feel the item in contact pushed back, or see a small gap