Ah, it's all coming clear now. You're not the first person to say that they couldn't work out how to include smilies. Seemed strange to me, as they are shown in a box to the right of the editor, ready to click on . . .
It turns out that somewhere down the line the default for new users was changed to the basic editor. I guess it was during a recent "upgrade"!
I've now changed everyone's setting to the enhanced editor with easy smilies and icons to click on. Should make things like embedding Youtube videos easier too.
Thanks for the heads up