yes, it uses buttons for the smiles.
replace it with simple icons:
<!-- Smilie Mod -->
<tr>
<td class="row2">
<img src="{template_url}/smilies/icon_biggrin.gif" onClick="smilie(this.form,' :D ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_smile.gif" onClick="smilie(this.form,' :) ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_sad.gif" onClick="smilie(this.form,' :( ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_surprised.gif" onClick="smilie(this.form,' :o ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_shock.gif" onClick="smilie(this.form,' 8o ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_confused.gif" onClick="smilie(this.form,' :? ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_cool.gif" onClick="smilie(this.form,' 8) ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_lol.gif" onClick="smilie(this.form,' :lol: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_mad.gif" onClick="smilie(this.form,' :x ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_razz.gif" onClick="smilie(this.form,' :p ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_redface.gif" onClick="smilie(this.form,' :oops: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_cry.gif" onClick="smilie(this.form,' :cry: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_evil.gif" onClick="smilie(this.form,' :evil: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_twisted.gif" onClick="smilie(this.form,' :twisted: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_rolleyes.gif" onClick="smilie(this.form,' :roll: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_wink.gif" onClick="smilie(this.form,' ;) ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_neutral.gif" onClick="smilie(this.form,' :| ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_exclaim.gif" onClick="smilie(this.form,' :!: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_question.gif" onClick="smilie(this.form,' :?: ')" style="width: 15px;" />
<img src="{template_url}/smilies/icon_idea.gif" onClick="smilie(this.form,' :idea:' )" style="width: 15px;" />
<img src="{template_url}/smilies/icon_arrow.gif" onClick="smilie(this.form,' :arrow: ')" style="width: 15px;" />
</td>
</tr>
<!-- End Smilie Mod -->