Ah, so software magic smoke is Blue?!? (and I guess it fills up the monitor screen?)

Depends on operating system. However one error I havent heard mentioned yet is binary overflow. That one is ALWAYS an interesting error...just for the sake of finding out what happens. As somebody mentioned before your computer DOES do what you tell it to do.....
The only smoke Ive ever seen in relation to a software problem was the smoke coming out of my or other people ears when we couldnt figure out a problem. And that wasnt even real visible smoke. Now if you screw with the hardware.....One of my friends got blue smoke coming out of his computer. (Misinstallation of a form of ram from what I was told)
On that note...it might be the hardware has magic smoke for which the program will not work if the smoke goes out. So the software needs the magic smoke in order to work. You could always think of software as the thoughts you decided the machine should 'think'. They dont always work the way you expect them to, sometimes they are in conflict, but it still requires things for the program to act on, whether they are real or not depends on the program and what it is meant to do.

A couple of comments:

First our friends at Microsoft have convinced us that the "Blue Screen of Death" is a feature not a bug put in to test the CTRL/ALT/DEL sequence. I think they used smoke and mirrors.

Second realize that software is the one thing that can let the smoke out of electronics or the noise out of the mechanical system. Command two mechanically linked motors to go in opposite direction and see which gets let go first, noise or smoke.