There should also have been an .xml gauge included in the download. You will need to make sure that you have a folder created within the gauges folder, and then make sure that the .xml file is in that folder - otherwise it won't work. For example, if the line in the panel config reads something like:
gaugeXX=smoke1!smoke2, 0,0,1
then you would need to make sure that there is a folder called 'smoke1' in the gauges folder, and a file smoke2.xml in the smoke1 folder. Now the smoke should work automatically as the throttle increases. As a check, the 'I' key won't activate the smoke.
I don't have the download you mention, but have programmed my own .xml gauge to do this, and it works fine. Please let me know if the problem is not fixed.
Good luck!