Hi, and thanks for your questions. I will answer them in a series of responces.
To make a model more smooth you need more triangles. This is done by using 'Max Area' for triangles or by creating a triagulated grid in the 'Surface Type' dialog box. This is exactly why these choices are there. With 'Max area' the existing triangle are sub-devided until no triangle has an area greater then the value specified. With 'Triangulated Grid' you just specify the grid size. In this case, however, non-square shaped models can get some real wierd edges due to the interpolation of the corners. But, remember, unnessary triagles can just be deleted.