It’s hard to tell exactly what all you’re doing, from the photo it looks like you have seams in your normal map, you need to make sure you have some padding around the UV islands where it duplicates the edge pixels a few layers so that seams like that don’t show up. It may also be that your UV’s aren’t laid out well because there’s a lot of seams there that would be unnecessary.
As far as smoothing goes–you have your low poly mesh, the only smoothing you would do would be Smoothing Groups in 3ds Max, where it controls which surfaces would appear to be smoothed together, some other methods like Meshsmooth/Turbosmooth/NURMS will subdivide the mesh which adds more polygons and that’s not what you’re wanting to do.