I have used any number of different methods of animation when building model railroads including movement, sound and light.  I have not, however, used smoke... that is until now.

The fairly recent advent of smokeless cigarettes, also called e-cigarettes, e-cigs or vapor cigarettes, has provided an opportunity for us to make small, inexpensive and quite impressive smoke machines.

I have been doing some experiments and have come up with a fairly simple method to create a good bit of smoke that can be turned on or off at will.

 More:  http://trainelectronics.com/Animation_Smoke/