That was a great article Fausto posted, although I don't agree with all the points mentioned about the smith machine, it was educational for me. One thing not mentioned here about smith style machines was something I saw in florida last summer...some of them have a slight tilt to them to alleviate the 'over the shins' problem. The problem they have with those is that a lot of people were standing in them backwards, so they could see themselves in the mirror! That HAS to be bad!
As for my bodysolid freeweight lever machine, the squat movement is exactly like a proper squat, only you are leaning maybe 8 or 10 degrees backwards, keeping tension on the abs. It also has a padded shoulder cradle sort of like a hack squat machine, and I love it, since my spine hates a bar across it. When I overdid it the other day (returning from time off from surgery) all the proper muscles got DOMS the next few days, so I know it's hitting all the right places save for the synergistic muscles used for balance. The weight does not go up in a straight line like a smith machine, but without the need to balance, and being in a regular motion, I have to add more weight than I can actually squat. (been up to 540 last cycle) My best squat was about 480, which re-injured my bad disc (#4 lumbar) and caused me to buy the machine.
My point here is that I found a machine that will allow you to "squat" if you have an injury that doesn't alllow you to freeweight it, and they are NOT useless as the article would suggest for the smith machines. Still, there are other problems with the machine I had to fix, as I posted in the home gym equipment forum.