I've heard that there are some bugs in sh3 when using Nvidia cards and there is a thread about it
(http://www.subsim.com/radioroom//sho...t=91915&page=1). The tip Ubisoft gave was to press Ctrl+P, but that just disables particle rendering.

You can try it, but I don't think it'll work. I tried to google the white smoke bug, but didn't find anything.
Anyway, hope you get it fixed soon