After converting my phpBB 2.0.22 board to Olympus i had to notify that smilies in signatures won't be displayed. But in posts they work perfectly.
They do not work
[list][*]in the preview in the UCP
[/*:m][*]by watching the profile
[*]in signatures attached to posts[/*:m][/list:u]
Without conversion it works perfectly, as well. Not only in posts, but also in preview/profile/signature.