From Derrick Riches,
Your Guide to Barbecues & Grilling.
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Smoke is the third leg of barbecue, with the other two being heat and time. Smoke is the ancient and time-honored way to add flavor to anything you can cook. In ancient times, smoke was used to preserve meat for long periods of time. Nowadays we use it to enhance the flavor of meats. Now don't run out to the saw mill and pick up some scrap wood. Though you might luck out and get something good, the wood for smoking meat must be selected very carefully.

Now while you don't have to use prepackaged wood chips to add a little smoke to your fire, you do want to make sure that what you're using is all wood, no glues, nails, chewing gum; well you get the picture. And more than this you need to pick the right wood for the job. Different woods leave different flavors. But before we take a closer look, there's one more thing to wrap up. Do you burn the wood or not? When using gas grills it's best to put presoaked wood chips in a smoker box or wrap them in a piece of aluminum foil with a lot of holes in it. This keeps your grill from filling up with ash and clogging the burners. But get that wood close to the heat. You need the heat to smolder the wood and this means a pretty high heat. If you are using a charcoal grill or smoker then you can either put the wood directly on the coals (once they've heated up) or place them in a box. Experiment a little and find out what works best for you.

Generally speaking any wood that is hard and free of resin (or sap) is good for making smoke. If the tree makes fruit or nuts you enjoy eating then the wood is typically good for smoking. Some wood, of course make better smoke than others. Woods like Apple have a mellow flavor and won't give you much in a short amount of time but if you’re cooking for a while then it has time to add that mellow flavor without overpowering the food. Woods like mesquite are very strong and while it gives you a good flavor quickly that flavor will become bitter fast so don't use too much or for too long.

If you haven't used wood before, start small. Use a 1/4 cup of presoaked chips on your grill and see what is does for you. One of the great things about barbecue is the wide variety of experimentation available to the backyard cook. Wood smoke is what gives outdoor cooking its outdoor flavor. A great way to experiment with wood is actually on the grill. Instead of risking that 20 hour brisket with a wood you've never tried before, try putting that wood to test on your grill next time you cook up some steaks or chops. Make sure you catch the scent of that wood. If the smoke is bitter and noxious you probably shouldn't be cooking with it. Read on to get an idea of the kinds of woods you can use.