Yes, Xizan was the smoke. His actual form was this incredibly stupid looking anchor/octopus thing with one eye that you only get to see at the end of the game.

Karmine was the best character in the game, but he didn't appear until later on. He had green hair and a cape he would wear to the side. It's been years since I've played that game, so I don't remember the story, but (SPOILER)he was the one responsible for summoning Xizan or something, and he was the main sentient villain in that game. He also royally whoops someone's ass before you fight him. I forget who.