Smiley is a small application that makes it easy to add new emoticons to iChat and iChat AV applications. With Smiley, you can add prebuilt emoticon packs or create your own images and add them easily and quickly.
Since you can't use voice inflection when you communicate with people online, people use smileys as a way to add emotion to their words. :-) If you look at it sideways you can see the smile. Also called emoticons.
A combination of characters, to express an emotion. E.g. :-) happy, :-( sad.